Taxes Pair up with an elbow partner…you need pen and paper with both full names at the top. Title it “Taxes” 1.) In your words explain what is a tax, and what it is used for? 2.) Give as many examples of the different types of taxes as you can think of (you should know at least 3 types) 3.) Give as many examples as you can think of ways that tax money is spent (Remember we are talking about the Federal and State Government so choose things you think the they would pay for that private citizens don’t directly pay for)

Expressed Powers of Money and Commerce Chapter 11-Section 1

Congressional Powers Expressed Powers-Powers afforded to the government explicitly and in specific wording in the constitution Implied Powers-Powers afforded to the government by reasonable deduction from the expressed powers Inherent Powers-Powers afforded to the government because it created a national government Commerce Power-The power of Congress to regulate interstate and foreign trade

Money Congress has the power to tax Why? The lack of the power to tax was a leading cause of creation of the Constitution Congress had to beg the states for money…most states essentially ignored requests from Congress The Purpose To pay debts Provide for the common defense and general welfare…in other words, to meet public needs Protect domestic industry

Types of taxes There are two general types of tax: Direct and Indirect Direct Tax: Paid directly to the government by the person on whom it is imposed Income FICA (payroll) Capital Gains: (stocks and real estate) Estate (death): Exempt for first 5.4 million of value of estate Indirect Tax: Paid to the government by someone else and then passed on to you as the consumer Fuel Alcohol Cigarettes Tariffs: A tax on foreign goods imported into country (cars, food, appliances, etc.)

Debt Congress has the power to borrow money How? Issues or creates debt in the form of: bonds, bills and notes Public debt: All of the unpaid money borrowed by Congress Deficit Financing: also called Deficit Spending Government spends more than it earns each year To fix that they borrow money taking on more debt to make up the difference Results: Downturn in national economy, major tax cuts (less income to the government), the “War on Terrorism” and wars in Iraq and Afghanistan

Currency & bankruptcy Congress has the power to coin money Why? With independence, a stable system of currency (money) collapsed: each state issued its own currency and some people still used English and Spanish coins as well. Money without taxing power is worthless. Creating a stable uniform currency was beneficial to the nation Legal Tender: Any kind of money that by law a creditor must accept as payment for debts First paper currency that was legal tender wasn’t printed until 1863! Bankruptcy: When a Federal court determines that a person or company is insolvent: unable to pay their debts in full

commerce Congress has the power to regulate interstate and foreign commerce (trade) Why? The lack of the power to regulate commerce was a leading cause of the creation of the Constitution Effect: This power is responsible for building a strong and united group of states Regulates commerce with foreign nations & between states Helps to prevent monopolies by corporations Has extended Federal authority into many areas of American life (the ban on discrimination based on race, color, religion, gender or national origin is an example)

Sources Adapted from Mr. Rosenstock’s Presentation “Everything you wanted to know about the Expressed Powers of Money and Commerce”