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Taxes and Spending

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					Taxes and Spending
I. Taxes as Sources of Revenue

   Taxes
     Payments by individuals and businesses
     Supports the activities of government
     Main way government raises money
   Individual Income – April 15 – IRS
   Corporate Taxes
   Social Insurance – employee and employer
   Excise taxes
   Customs – imports
   Estate
II. Taxes and the Economy

   Tax laws are complex
    Loopholes and provisions
      Give breaks to special industries – oil
   Many attempts at reforms: Tax
   Reform Act of 1985
    Provide tax credits to lower income
    brackets
III. Borrowing to Get Revenue

   Federal Government Borrows to raise
   money by selling securities
     Bonds, notes, and certificates
     Government pays interest on these
   When spending is greater than income, the
   government goes into debt
     Debt affects the federal budget and economy
IV. What its spent on

   Direct benefit payments – Social
   Security
   National Defense – Bombs and stuff
   Interest on National Debt – Pay down
   Grants to state and local governments
   – education
V. Managing the Economy

   Fiscal Policy- government spending and
   taxation to influence economy
   Monetary Policy – controlling the supply of
   money and credit to influence the economy
   The FED (Federal Reserve System)
     Banker’s Bank
     Determines monetary and fiscal policy (interest
     rates)

				
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posted:9/10/2011
language:English
pages:6