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GOVERNMENTCHAPTER 16 FINANCING
GOVERNMENT - THE BUDGET
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)
Taxes
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.
Public Debt
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
Spending
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?
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