1. Welcome 4/5/11 Answer PCQ’s

2. Paying for government Taxes – Should people who make more money pay more in taxes than people with less money? Why or why not? Proportional: requires each taxpayer to pay the same proportion of their income in taxes. Progressive: takes a higher percentage from someone with more $ than from someone with less. Regressive: takes a larger percentage of tax from the income from someone with less $ than from someone with higher income. Ex.?

3. REGRESSIVE FAMILYNELSONNEUMAN ANNUAL INCOME100,00050,000 ANNUAL SPENDING ON EVERYDAY ITEMS 24,000 5 PERCENT SALES TAX1,200 SALES TAX AS % OF INCOME 1.22.4

4. Direct and indirect Direct – a tax on income (no choice, no one else can pay it) Indirect – ends up as part of the price a consumer pays for something. Who bears the brunt of this?

5. Government policy – 3 economic goals Promote economic growth Maintain stable prices Ensure full employment The National Debt – what are some things government spends $ on? Most $ is spent on entitlement programs (SS, medicare, medicaid).

6. Can tax cuts stimulate economic growth? What would tax cuts mean for discretionary income? What would people do with extra $ that they’re not paying in taxes What happens to government services if taxes are cut? Consider these questions and explain your opinion in one brief paragraph.