6.3 Financing and Spending the Budget
Do Now:
Who should pay?
Financing the Budget
Income Tax-Constituents pay tax based on income
Progressive Tax-Tax that increases as income increases
Regressive Tax-Tax that increases as income decreases
Flat Tax-Tax born equally independent of incomeTax Return-The official declaration of a constituents income, exemptions, and deductions
Financing the Budget
Corporate Income Tax-Tax on the net income of
businesses
Payroll Taxes- Social Security, Medicare, Unemployment
Excise Tax-Taxes on the sale/consumption of specific
goods
Estate Tax-Tax imposed on a dead person’s assets
Gift Tax-Tax imposed on gifts over $13,000 in value
Custom Duty-Tax imposed on imported goods
Creating the Budget
1. Agencies send budget estimates to the President’s Office of Management and Budget.
2. The OMB and president review and revise the budget.
3. The Budget Committees in congress review the budget with the help of the Congressional Budget Office.
4. Then both houses must pass a joint resolution affirming the budget.
The Budget
Interest-Charges for borrowing moneyDeficit-Yearly shortfall between income and spendingSurplus-Yearly overage between income and spendingPublic Debt-All outstanding debts of the GovernmentEntitlements-Federal benefits paid to eligible partiesDiscretionary Spending-Congress determines every yearMandatory Spending-Spending built into gov’t programs
Spending the Budget
So where exactly does all of the money go?
The Debt
When you spend more than you earn, you end
up in debt!
The Debt
“A national debt, if it is not excessive, will be to us a national blessing.”
Alexander Hamilton
The Debt
So who owns our debt?
6.3 Assignment
Who should bear the burden of financing the government?
Everyone evenly or some more than others?
AndIs debt good/bad for our
country? Who should own it?Spend less or tax more?