1. Chapter 12 Notes Paying for Government

2. Raising Money I. Government is Expensive

3. Raising Money I. Government is Expensive We have 300 million people, some of whom want something

4. Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion

5. Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third

6. Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third Debt (spending more than we take in)

7. Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third Debt (spending more than we take in) –Interest; money paid on borrowed money

8. Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third Debt (spending more than we take in) –Interest; money paid on borrowed money National Debt = Money borrowed + Interest

9. II. Taking our Money

10. –Compulsory taxes (federal, state, local)

11. II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people

12. II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities

13. II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities Differing view

14. II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities Differing view –taxes too high, not enough services provided

15. II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities Differing view –taxes too high, not enough services provided –Which programs need money, which should be cut?

16. b. Principles of Taxation

17. –Ability to pay; taxes on income are lower for lower incomes

18. b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items

19. b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items sales tax

20. b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items sales tax –Scheduled payment; taxes taken out of pay on a regular schedule

21. b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items sales tax –Scheduled payment; taxes taken out of pay on a regular schedule paying in a lump sum not practical

22. c. Purposes of taxation

23. –To raise money…lots of it

24. c. Purposes of taxation –To raise money…lots of it –Pays to run government

25. c. Purposes of taxation –To raise money…lots of it –Pays to run government –To regulate or to control

26. c. Purposes of taxation –To raise money…lots of it –Pays to run government –To regulate or to control Gas tax - decrease usage Sin tax - cigarette or alcohol tax

27. III. Other ways the government has of getting money from us

28. –Fees - payments charged by governments for various licenses

29. III. Other ways the government has of getting money from us –Fees - payments charged by governments for various licenses Garbage fees (city of Buffalo) Drivers licenses, auto registration

30. III. Other ways the government has of getting money from us –Fees - payments charged by governments for various licenses Garbage fees (city of Buffalo) Drivers licenses, auto registration –Fines - fees for breaking the law

31. III. Other ways the government has of getting money from us –Fees - payments charged by governments for various licenses Garbage fees (city of Buffalo) Drivers licenses, auto registration –Fines - fees for breaking the law illegal parking, speeding Violating pollution laws

32. Bonds - Government borrowing at a global level

33. –issue a bond, or a promise to pay money back at a certain interest

34. Bonds - Government borrowing at a global level –issue a bond, or a promise to pay money back at a certain interest Savings Bonds Treasury Notes Treasury Bonds

35. The End