1. 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)

2. Expressed Powers of Money and Commerce
Chapter 11-Section 1

3. 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

4. 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

5. 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.)

6. 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

7. 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

8. 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)

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