definitions  Tax Charge levied by the gov. to meet public needs  Levy To impose  Revenue How much money you bring in  Expenditure How much money you spend

Biggest Gov. Expenditures  Federal Gov. ○ Social Security  State Gov. ○ Education  Local Gov. ○ Education

Types of Taxes  Income tax Tax on earnings of an individual or business Where the Federal Gov. gets most of its revenue Progressive—the more $ you make, the more income tax you pay States may also levy an income tax

 Social Insurance Taxes Pays for Social Security, Medicare, Unemployment Taken directly out of your paycheck or paid by employer Regressive—everyone pays the same percentage

 Excise Tax Tax on certain goods “sin tax” Cigarettes, alcohol, gas Indirect tax—company pays, then passes the cost onto the customer

 Sales Tax Tax on goods you purchase Regressive State governments collect this ○ Where state governments get most of their tax revenue

 Property Tax Tax on houses and land Sometimes cars, boats, motorcycles

Estate Tax  Tax on the assets of a person’s estate when they die

 Gift Tax Tax on money or property a living person gives to another Stops people from avoiding estate tax Can give up to $10,000 to certain people