1. Financing Government
Chapter 16

2. Taxes and Other Revenue
Section 1
Taxes and Other Revenue

3. Fiscal Policy
Fiscal policy is the various means the government uses to raise and spend money to influence the nation’s economy.

4. Taxation
“In this world nothing can be said to be certain, except death and taxes” – Benjamin Franklin
First power granted to Congress in the Constitution.
Mostly to raise money to pay for costs of operating the federal government.
Congress’s power to tax is limited by the provisions in the Constitution.

5. Current Federal Taxes Income Tax Individual Income Tax
Authorized with the passage of the 16th Amendment
Government’s largest source of income
Progressive Tax
Individual Income Tax
Tax is levied on each person’s taxable income 10%-35%
Taxes were decreased in 2001, 2002, and 2003 and cuts were extended in 2010.

6. Taxes Cont… Social Insurance Taxes
OASDI (Social Security), Medicare, & Unemployment taxes
Social Security and Medicare paid by the employee and the employer.
Unemployment paid by the employer
Regressive Taxes

7. Taxes Cont… Excise Taxes Estate and Gift Taxes Customs Duties
Tax laid on the manufacture, sale, or consumption of goods, and or the performance of services
Gas, tobacco, oil, etc…
Estate and Gift Taxes
Estate – levy imposed on the assets of someone who dies
Gift – levy imposed on a gift from one living person to another
Customs Duties
Taxes on goods imported into the U.S.

9. Nontax Revenue Miscellaneous receipts from a variety of sources.
Interest on federal loans
Canal tolls
Fees from passports, copyrights, patents, and trademarks
Sale or lease of public lands
Fines imposed by federal courts.