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GOVERNMENT CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET

CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET. Taxes Progressive Taxes – get bigger the more money you make Income Tax Regressive Taxes – the same

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Page 1: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

GOVERNMENTCHAPTER 16 FINANCING

GOVERNMENT - THE BUDGET

Page 2: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

REVENUE – Raising $

Taxes Progressive Taxes – get bigger the more

money you make Income Tax

Regressive Taxes – the same for everyone Sales Tax

Selective Sales Tax – on specific items Excise Tax (luxury tax)

Page 3: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

Taxes

Page 4: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

Borrowing $

Deficit spending – the government spends more $ than it brings in.

Surplus – the government brought in more $ than is spent (doesn’t usually happen)

Public Debt – All of the money the government has borrowed and not yet repaid, including the interest due.

Page 5: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

Public Debt

Page 6: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

Spending

Uncontrollables – money that Congress is committed to spend. Entitlements – benefits that are guaranteed to

those people who qualify Largest – Social Security

Controllable – money that may or may not be spent, it is up to Congress to decide AKA – Discretionary Spending

Ex. – Shelter houses at National Parks

Page 7: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

Spending

Page 8: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

Budgeting

GDP – total value of all goods & services sold by the United States

Inflation – increase in prices Deflation – decrease in prices Fiscal Policy – the governments power to

tax & spend. How much of each?

Page 9: CHAPTER 16 FINANCING GOVERNMENT - THE BUDGET.  Taxes  Progressive Taxes – get bigger the more money you make  Income Tax  Regressive Taxes – the same

Raising v. Spending $

Should we spend more $, then… Raise taxes OR Go further into debt?

Should we cut spending, but… Not have to raise taxes Not be able to fund as many programs