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Revenues and Expenditures

Revenues and Expenditures. Ch. 25. Personal income : Tax on an individual’s yearly income. Granted by the 16th amendment April 15th is income tax day. Corporate income : Tax on a corporation’s profit. Social Insurance : Social security tax. (FICA).

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Revenues and Expenditures

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  1. Revenues and Expenditures Ch. 25

  2. Personal income: Tax on an individual’s yearly income. • Granted by the 16th amendment • April 15th is income tax day. • Corporate income: Tax on a corporation’s profit. • Social Insurance: Social security tax. (FICA). • Excise: Special tax on alcohol, tobacco, and gasoline. • Estate: Tax on the assets of the deceased. • Inheritance: Tax paid on anything person inherits. • Gift: Tax paid on the value of an expensive gift received. • Sales: Tax paid on all purchases. • Property: Tax on the value of property. Can include buildings, stocks, bonds, cars. Major United States Taxes

  3. Revenue: Money the government receives. • Expenditures: Money the government spends. • 60 to 80 percent of state and local government revenue comes from taxation. • Intergovernmental Revenue: Money received from other governments. • Example: States receive a big chunk of money from the Federal Government. Local governments then can get some of that money from the state. • Nearly 100 percent of federal government revenue comes from taxes. Taxation

  4. The government sometimes abuses its power to tax which leads to revolts. • Stamp Act (1765): British tax on virtually all goods. • Tea Act (1773): British tax on tea. Led to the Boston Tea Party. • British taxes lead to the American Revolution where the United States became a free country after defeating England. Taxation Problems

  5. Shay’s Rebellion (1786): Heavy state taxes in Massachusetts put many farmers in debt. Daniel Shay led a group of 1,200 farmers in a revolt. The revolt was put down. • Tariff of 1828: High tariff on imports. Hurt the southern states because of lack of industries. Secession was openly discussed in South Carolina. • Tariff: Tax on imports. • Secession: Separate from the nation. United States Taxation Problems

  6. The first government of the United States was the Articles of Confederation. • The national government could not tax under the Articles. • Under the Constitution, the government is given a limited power to tax to keep it from abusing its power. Taxation Powers

  7. The Constitution gives the government the power to tax. • All appropriations bills (tax bills) are introduced in the House of Representatives. • Appropriations bills are laws that allow spending for a particular activity • All national taxes are the same throughout the country. • The 14th amendment says all groups must be taxed equally. Limits on Taxation

  8. Progressive tax: Based on income. Higher taxes on those with higher incomes. Those who make less than a certain minimum pay no taxes. • Regressive tax: People pay the same amount with no consideration of income. • Effects people with lower incomes because it’s a larger percentage of their total income. • Proportional tax: Takes the same percentage of all incomes. Tax Classifications

  9. Tax on income • 16th amendment (1913): Gave the government the power to collect income tax. • Personal income and corporate income are the two types. Income Tax

  10. The deadline is April 15th. • All taxpayers fill out a tax return form and send it to the Internal Revenue Service (IRS). • An exemption is a portion of income that is not taxed. • Deductions are for medical expenses and charitable contributions. They are not taxed. • Everything else is taxable income. Tax Return

  11. Tax paid at the time of purchase. • The revenue is sent to state and local governments. • Many state governments exclude necessary items from the sales tax. • North Carolina is the 1st Friday in August Sales Tax

  12. Employers withhold funds from checks to pay the state and national government. • Because of this, taxpayers do not pay as much at the end of the year. • Some taxpayers receive a refund. Paying Income Tax

  13. People with higher incomes pay a higher percentage in taxes. • There are tax percentage rates of 10%, 15%, 25%, 28%, 33%, and 35%. • The belief is that people with less money need more for necessities. Income tax is a Progressive Tax

  14. The property is examined to assess the value. • Local governments set the tax rate. • Property taxes have increased steadily over the years. Property Tax

  15. Designed to raise revenue and protect American businesses. • Products are made cheaper in other countries and brought to America. • When America charges a tariff, the other country charges a tariff on American goods. • Tariffs have caused many problems in U.S. history. Tariffs

  16. The government will sell and rent land. • The government will charge tolls for the use of roads and canals. • The government will charge fees for driving, hunting, fishing, and getting married. • Charge fines (traffic). • Government run lotteries to provide revenue, but they are controversial. Non-Tax Revenue

  17. Answer the following on a separate piece of paper and turn in - • In at least 2 paragraphs, explain which tax classification you feel is the most fair? Give at least 3 reasons why. • If the federal government needed to increase their revenue, which kind of tax (ex. Sales, excise, estate, income…..) do you think it should increase? Why? 1-2 paragraphs

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