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15 Cards in this Set
- Front
- Back
Power to tax |
-The constitution gives Congress the power to tax. -Taxing power raises money needed to operate the Federal government. -May be used to regulate or discourage an activity that the government believes to be harmful to the general public. |
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Constitutional limitations on taxing |
Expressed limitations: - Taxes may be levied only for public purposes. - Prohibits export taxes. -Direct taxes must be distributed evenly among the states. - All indirect taxes must be set at the same rate in all parts of the country. Implied limitations: - Federal government cannot tax any state or local government in the exercise of their governmental functions. -Cannot tax a church. |
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Federal Taxes |
- Income taxes. - A tax levied on a person's or corporation's income during the previous year. -Largest source of federal income today. Progressive tax- the higher a person's income, the higher the tax rate. - Congress can change the percentage pf the tax. Payroll Taxes- a tax applied to a percentage of a person's salary, matched by the employer, to fund specific social insurance programs. Regressive Tax- Taxes levied at a fixed rate, no matter a person's income level or his ability to pay them. Excise Tax- A tax laid on the manufacture, sale or consumption of goods and/ or services. -A tax placed on gasoline,oil,tires,liquor,wine,beer,firearms,telephone services,airline tickets, etc. Estate Tax- Tax levy imposed on the assets of someone who dies. a. Amount in estate in order to be taxed:5.45 million or above. Gift Tax- Tax imposed on a gift from one living person to another. Customs Duties- Taxes laid on goods brought into the US from abroad. -This used to be the tax that brought in the most money to the US in our first 100 years(before we created income tax). |
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Taxing for Non Revenue Purposes |
- There are goods the government taxes not for the sole purpose of making money, but instead to try and dissuade consumers from purchasing these goods or producers from creating them. |
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Non tax revenues |
- Most come from interest on loans made by the federal government. -Other sources: interest on other loans, passport,copyright,patent,trademark fees, the sale or lease of federal lands, court fines. Interest- A charge for borrowed money. |
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Federal spending |
- Just since the Great Depression and WWII, the Government started spending large amounts of money. Spending Priorities- Most money spent financing the Social Security Administration and the Health and Human Services Department for Entitlements. Entitlements- Benefits that the federal law says must be paid to all those who meet the eligibility requirements. -Second largest spending category of spending is defense spending. -Third largest category of spending is paying of the interest and loans of public debt. Controllable Spending- Items included in the federal budget that Congress and the President have allocated funds for Discretionary spending. Uncontrollable Spending- Spending the President and Congress have no power to change directly. Mandatory Spending. -Federal budget is created through a joint process involving the President and Congress. |
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Deficit |
- The government spending more money than it makes in one year. |
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Surplus |
-the government making more money than it spends in one year. |
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Debt |
-All the money the government has borrowed and not yet repaid, plus the interest on that borrowing. |
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Demand Side economics |
-the government spends a lot of money to create jobs and stimulate the economy, even if it means going into debt. |
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Supply side economics |
-give tax cuts to the rich and businesses to stimulate the economy.Private businesses will create more jobs. |
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Gross Domestic Product |
-the total value of all goods and services produced within the US in one year. |
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inflation |
an increase in prices throughout the economy. |
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deflation |
-a decrease in prices throughout the economy. |
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recession |
-where there is absence of growth and the economy shrinks. |