Taxation and Borrowing Civics Chapter 20 Section 1 Mr. Collins and Mrs. Kozlik CE.13b,c

Government Spending Government has expenses Government provides many services to the public that we wouldn’t have Interstate highways United States Postal Service National Defense Provides benefits to everyone at the same time

Ways Government Gets Money Taxes Borrowing Fees (Park Fees)

16th Amendment Authorizes Congress to tax personal and business incomes

Effects of Taxation Tax increases reduce the amount of money available for businesses and individuals to spend Tax decreases increase the amount of money available for businesses and individuals to spend

Effects of Borrowing The more money the government borrows the less there is available for businesses and individuals to borrow The less money the government borrows the more there is available for businesses and individuals to borrow

Government Spending Increased government spending increases demand which may increase employment and production Decreased government spending reduces demand which may result in a slowing of the economy

Government Spending (cont.) Increased government spending may result in _____ taxes Higher is the answer Decreased government spending may result in _____ taxes Lower is the answer