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Chapter 12 NotesChapter 12 Notes
Paying for Paying for GovernmentGovernment
Raising MoneyRaising Money
I. Government is ExpensiveI. Government is Expensive
Raising MoneyRaising Money
I. Government is ExpensiveI. Government is Expensive• We have 300 million people, some of whom
want something
Raising MoneyRaising Money
I. Government is ExpensiveI. Government is Expensive• We have 300 million people, some of whom
want something• 2005 spending was 2.5 trillion
Raising MoneyRaising Money
I. Government is ExpensiveI. Government is Expensive• We have 300 million people, some of whom
want something• 2005 spending was 2.5 trillion• Defense is 19 percent• Social Security is one third
Raising MoneyRaising Money
I. Government is ExpensiveI. Government is Expensive• We have 300 million people, some of whom
want something• 2005 spending was 2.5 trillion• Defense is 19 percent• Social Security is one third • Debt (spending more than we take in)
Raising MoneyRaising Money
I. Government is ExpensiveI. Government is Expensive• We have 300 million people, some of whom
want something• 2005 spending was 2.5 trillion• Defense is 19 percent• Social Security is one third • Debt (spending more than we take in)
– Interest; money paid on borrowed money
Raising MoneyRaising Money
I. Government is ExpensiveI. Government is Expensive• We have 300 million people, some of whom
want something• 2005 spending was 2.5 trillion• Defense is 19 percent• Social Security is one third • Debt (spending more than we take in)
– Interest; money paid on borrowed money• National Debt = Money borrowed + Interest
II. Taking our MoneyII. Taking our Money
II. Taking our MoneyII. Taking our Money– Compulsory taxes (federal, state,
local)
II. Taking our MoneyII. Taking our Money– Compulsory taxes (federal, state,
local)
– everyone pays, businesses & people
II. Taking our MoneyII. Taking our Money– Compulsory taxes (federal, state,
local)
– everyone pays, businesses & people
a. Establishing Prioritiesa. Establishing Priorities
II. Taking our MoneyII. Taking our Money– Compulsory taxes (federal, state,
local)
– everyone pays, businesses & people
a. Establishing Prioritiesa. Establishing Priorities
• Differing view
II. Taking our MoneyII. Taking our Money– Compulsory taxes (federal, state,
local)
– everyone pays, businesses & people
a. Establishing Prioritiesa. Establishing Priorities
• Differing view– taxes too high, not enough services
provided
II. Taking our MoneyII. Taking our Money– Compulsory taxes (federal, state,
local)
– everyone pays, businesses & people
a. Establishing Prioritiesa. Establishing Priorities
• Differing view– taxes too high, not enough services
provided
– Which programs need money, which should be cut?
b. Principles of Taxationb. Principles of Taxation
b. Principles of Taxationb. Principles of Taxation– Ability to pay; taxes on income are
lower for lower incomes
b. Principles of Taxationb. Principles of Taxation– Ability to pay; taxes on income are
lower for lower incomes
– Equal Application; taxes should be applied at the same rate for similar taxable items
b. Principles of Taxationb. Principles of Taxation– Ability to pay; taxes on income are
lower for lower incomes
– Equal Application; taxes should be applied at the same rate for similar taxable items• sales tax
b. Principles of Taxationb. Principles of Taxation– Ability to pay; taxes on income are
lower for lower incomes
– Equal Application; taxes should be applied at the same rate for similar taxable items• sales tax
– Scheduled payment; taxes taken out of pay on a regular schedule
b. Principles of Taxationb. Principles of Taxation– Ability to pay; taxes on income are
lower for lower incomes
– Equal Application; taxes should be applied at the same rate for similar taxable items• sales tax
– Scheduled payment; taxes taken out of pay on a regular schedule• paying in a lump sum not practical
c. Purposes of taxationc. Purposes of taxation
c. Purposes of taxationc. Purposes of taxation– To raise money…lots of it
c. Purposes of taxationc. Purposes of taxation– To raise money…lots of it
– Pays to run government
c. Purposes of taxationc. Purposes of taxation– To raise money…lots of it
– Pays to run government
– To regulate or to control
c. Purposes of taxationc. Purposes of taxation– To raise money…lots of it
– Pays to run government
– To regulate or to control• Gas tax - decrease usage• Sin tax - cigarette or alcohol tax
III. Other ways the government III. Other ways the government has of getting money from ushas of getting money from us
III. Other ways the government III. Other ways the government has of getting money from ushas of getting money from us– Fees - payments charged by
governments for various licenses
III. Other ways the government III. Other ways the government has of getting money from ushas of getting money from us– Fees - payments charged by
governments for various licenses• Garbage fees (city of Buffalo)• Drivers licenses, auto registration
III. Other ways the government III. Other ways the government has of getting money from ushas of getting money from us– Fees - payments charged by
governments for various licenses• Garbage fees (city of Buffalo)• Drivers licenses, auto registration
– Fines - fees for breaking the law
III. Other ways the government III. Other ways the government has of getting money from ushas of getting money from us– Fees - payments charged by
governments for various licenses• Garbage fees (city of Buffalo)• Drivers licenses, auto registration
– Fines - fees for breaking the law• illegal parking, speeding• Violating pollution laws
• Bonds - Government borrowing at a global level
• Bonds - Government borrowing at a global level– issue a bond, or a promise to pay
money back at a certain interest
• Bonds - Government borrowing at a global level– issue a bond, or a promise to pay
money back at a certain interest• Savings Bonds• Treasury Notes• Treasury Bonds
The EndThe End
