1. Government Revenue
Funds raised through taxing and borrowing to pay for government expenditures

2. What does this chart tell you?
Ask students what they notice about this chart. What information does this chart provide? What does this tell you about the deficit? What does it tell you about individual and corporate income taxes?

3. WHAT IS BEING TAXED?
Income
Property
Consumption

4. TYPES OF TAXES Federal State Local Individual Federal Income Tax (#1)
Individual State Income Tax
Property Tax (#1)
FICA
(Federal Insurance
Corporations Act)
- Social Security
- Medicare
Sales Tax (#1)
Utility Tax
(taxes on cable,
phone, electricity,
etc.)
Excise Taxes
Gas
Alcohol
Tobacco
“sin” tax
Corporate Income Tax
Corporate Income Tax
Individual Local Income Tax (rarely)
Federal Taxes
Individual Income Tax: tax on the income an individual makes from wages and investments.
This is a progressive tax and households pay a % dependent on the tax bracket
FICA (Federal Insurance Corporations Act):a payroll tax taken out one’s paycheck for the Social Security and Medicare systems, which provide an income and medical care to retired and disabled Americans.
Social Security:6% of income up to $98,000
Medicare- 14% for all
Corporate Income Tax: Corporations are taxed off of their profits.
Estate Tax: deals with the transfer of property when a person dies.
Gift Tax: placed on large donations of money- paid by the donor.
State Taxes
Sales Tax– also known as an excise tax. It is a tax that depends on the value of goods/services sold and states have different levels. Therefore this is a regressive tax
Michigan 6%
Individual Income Taxes: tax on the income an individual makes from wages and investments.
This is a proportional tax
“Sin” taxes: tax on activities deemed socially undesirable (cigarettes, alcohol, lottery)
$2.00 on a pack of cigarettes since 2004
Beer= 20 cents/gallon, wine= 51 cents/gallon, liquor= 4%
State fees: Fees charged to individuals for certain activities (hunting and drivers licenses, tuition, hospitals, state park fees)
Local Taxes
Property Tax- assessed each year to indicate home value
It is a proportional tax based on value of home
Also based partly on community vote for mileage (police, education, infrastructure, ect)
Utility Payments- taxes on cable, phone, etc.
Tariffs
Estate Tax / Gift Tax
Licenses and Fees:
Parks, Marriage, Auto
Licenses and Fees:
Dog, Parking Meters

5. WHAT IS BEING PROVIDED? Defense Infrastructure Social Welfare
A program that provides assistance to needy individuals and families

6. TYPES OF PUBLIC SEVICES
Federal
State
Local
Schools:
Secondary / College
Police and Fire
National Defense
Utilities (water, cable)
Social Welfare:
Medicare
Food Stamps
Unemployment
Healthcare
Social Welfare:
Medicaid
Family Planning
Foster Care
Libraries
Museums
Community Centers
Airports
Research:
Space, Medicine
Police
Jails
Waste Management
Federal Taxes
Individual Income Tax: tax on the income an individual makes from wages and investments.
This is a progressive tax and households pay a % dependent on the tax bracket
FICA (Federal Insurance Corporations Act):a payroll tax taken out one’s paycheck for the Social Security and Medicare systems, which provide an income and medical care to retired and disabled Americans.
Social Security:6% of income up to $98,000
Medicare- 14% for all
Corporate Income Tax: Corporations are taxed off of their profits.
Estate Tax: deals with the transfer of property when a person dies.
Gift Tax: placed on large donations of money- paid by the donor.
State Taxes
Sales Tax– also known as an excise tax. It is a tax that depends on the value of goods/services sold and states have different levels. Therefore this is a regressive tax
Michigan 6%
Individual Income Taxes: tax on the income an individual makes from wages and investments.
This is a proportional tax
“Sin” taxes: tax on activities deemed socially undesirable (cigarettes, alcohol, lottery)
$2.00 on a pack of cigarettes since 2004
Beer= 20 cents/gallon, wine= 51 cents/gallon, liquor= 4%
State fees: Fees charged to individuals for certain activities (hunting and drivers licenses, tuition, hospitals, state park fees)
Local Taxes
Property Tax- assessed each year to indicate home value
It is a proportional tax based on value of home
Also based partly on community vote for mileage (police, education, infrastructure, ect)
Utility Payments- taxes on cable, phone, etc.
Roads
State Parks
Public Transportation
Roads (Interstates)

7. MANDATORY vs. DISCRETIONARY SPENDING
The programs/items the government must spend money on, by law.
The programs/items the government is free to increase or decrease spending as they wish.

8. MANDATORY SPENDING Child Nutrition Programs Food Stamps Head Start
Housing Choice Voucher
Head Start
Interest on debt:
Entitlements:
Veterans Disability
By law, the government must pay off the interest it accrues each year.
Child Tax Credit
Temporary Assistance for Needy Families (TANF)
Medicare
Obamacare Subsidies
Social Security
Low Income Home Energy Assistance Program
Children’s Health Insurance Program (CHIP)
Unemployment Compensation
Social Welfare programs that people are “entitled to” or owed if they meet a certain requirement
Supplemental Security Income
Earned Income Tax Credit
Lifeline (Obamaphone)
Military Benefits
Medicaid
Federal Pensions
Pell Grants

9. DISCRETIONARY SPENDING

10. TOTAL SPENDING
100% earned means it has a clear revenue stream (collect payroll taxes to cover it directly)
50% earned medicare means direct taxes collected only pays for hospital care. Dr. visits and prescription drugs were not part of original tax (find money elsewhere)

11. TOTAL SPENDING