[ 8.2 ] Federal Taxes Learning Objectives Identify the basic characteristics and importance of individual and corporate income taxes at the national level. Explain the purpose and importance of Social Security, Medicare, and unemployment taxes. Identify other types of taxes levied at the national level.

Individual and Corporate Income Taxes Individual Income Taxes Individual Tax Brackets Tax Withholding Filing a Tax Return Corporate Income Taxes

Individual and Corporate Income Taxes Based on this graph, what effect would an economic downturn, with lower corporate and individual earnings, have on government receipts? Explain.

Social Security, Medicare, and Unemployment Taxes In addition to withholding money for income taxes, employers withhold money for taxes authorized under the Federal Insurance Contributions Act, or FICA. FICA taxes fund two large government social-insurance programs, Social Security and Medicare. Employees and employers share FICA payments.

Social Security, Medicare, and Unemployment Taxes Social Security Taxes Medicare Taxes Unemployment Taxes

Social Security, Medicare, and Unemployment Taxes The gap between what Medicare takes in and what it spends has been widening. What are two possible solutions to the problem presented by this graph?

Other National Taxes Excise Taxes Estate Taxes Gift Taxes Tariffs—Taxes on Imported Goods Taxes That Affect Behavior

Other National Taxes How does this graph support the assertion that tariffs today are mainly intended to protect American farms and businesses from foreign competition?

Quiz: Individual and Corporate Income Taxes What is a person’s taxable income? A. the income subject to the highest tax rate B. the income subject to the lowest tax rate C. gross income minus exemptions and deductions D. all the money a person earns in a given year

Quiz: Social Security, Medicare, and Unemployment Taxes Which idea or concept underlies Social Security, Medicare, and unemployment taxes? A. establishing a proportional taxation system B. ensuring that people do not have to save for their retirement C. correcting inequities in the individual income tax D. supporting people who have limited ability to support themselves through work

Quiz: Other National Taxes Why do we have tariffs today? A. to protect American farmers and industries from foreign competitors B. to discourage people from buying harmful products C. to keep people from avoiding estate taxes by giving away money before they die D. to encourage energy conservation and other worthwhile activities

[ 8.3 ] Federal Spending Learning Objectives Analyze categories of expenditures in the U.S. federal budget. Describe major entitlement programs. Identify major types of discretionary spending in the federal budget.

Mandatory and Discretionary Spending What is the largest spending category in the budget represented here?

Government Entitlements Social Security Medicare Medicaid Other Mandatory Spending Programs

Government Entitlements As the nation gets older, the top of the population pyramid gets larger. Compared to 1980, how will the ratio of workers to Social Security recipients have changed by 2035?

Spending on Discretionary Programs Defense Spending Other Discretionary Spending Federal Aid to State and Local Governments

Spending on Discretionary Programs About what percentage of discretionary spending went to defense in the budget year shown?

Quiz: Mandatory and Discretionary Spending The portion of the budget about which lawmakers today make year-to-year spending decisions is approximately A. two thirds of the budget. B. all of the budget. C. one third of the budget. D. one half of the budget.

Quiz: Government Entitlements What key issue challenges the largest entitlement programs in the United States? A. an aging population B. skyrocketing rates of taxation C. a shrinking number of beneficiaries D. lack of public support for aiding retirees

Quiz: Spending on Discretionary Programs About how much of the federal government’s discretionary spending currently goes toward defense? A. about one eighth B. about one fourth C. about half D. about three fourths