Transcript Chapter 12: Paying for Government

HOLT
American Civics
Chapter 12
Paying for Government
Section 1: Raising Money
Section 2: Types of Taxes
Section 3: Managing the Country’s Money
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 1: Raising Money
OBJECTIVES
 Why is the cost of government high?
 How do government officials decide how to
spend the government’s money?
 What guidelines do governments use when
taxing citizens?
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 1: Raising Money
The cost of government is high due to:
 A population of more than 281 million people
 The rising cost of living
 More government programs and services like
defense spending and payments to the elderly,
disabled, or impoverished
 The national debt
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 1: Raising Money
Deciding how to spend the
government’s money:
 Officials establish government’s priorities.
 Priority is given based on urgency and need.
 Debate over the country’s priorities is
common.
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 1: Raising Money
Tax guidelines:
 Ability to pay—based on earned incomes;
poor do not pay income tax
 Equal application—tax applied at the same
rate for similar taxable items
 Scheduled payment—taxes due by April 15
 Fees, fines, and payments for special services
also raise government funds.
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 2: Types of Taxes
OBJECTIVES
 What are the different types of taxes?
 What is the difference between progressive
and regressive taxes?
 What are tariffs, and how can they be used to
help the U.S. economy?
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 2: Types of Taxes
Different types of taxes:
 Individual income tax—the largest source of tax
revenue; most citizens pay federal, state, and local
income taxes
 Sales and excise tax—sales taxes are collected by
state or local governments; excise taxes (on “luxury”
items) are collected by the federal government
 Property taxes—chief income for most local
governments; funds public education
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 2: Types of Taxes
Different types of taxes: (continued)
 Estate, inheritance, and gift tax—estates of the
deceased, value of inheritances, and monetary gifts
above $10,000 are taxable by the federal government
 Import tax—tariffs on imported products used to
regulate trade
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 2: Types of Taxes
Progressive and Regressive Taxes
 Progressive taxes take a larger percentage of
income from high-income groups. Example:
individual income tax
 Regressive taxes take a larger percentage of
income from low-income groups. Example:
sales taxes
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 2: Types of Taxes
Tariffs and the U.S. Economy
 Tariffs are taxes placed on goods imported from
foreign countries.
 Tariffs can help the U.S. economy by:
 Regulating trade
 Retaliating against tariffs placed by foreign countries
on U.S. goods
 Protecting American industries against foreign
competition
 Raising prices on foreign goods
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 3: Managing the Country’s Money
OBJECTIVES
 How do governments collect public money?
 What steps are involved in creating the federal
budget?
 How large is the national debt, and why?
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 3: Managing the Country’s Money
How governments collect public money:
 Internal Revenue Service—collects federal
taxes
 U.S. Customs Service—collects taxes on
imported goods
 State and local governments collect taxes
through their own collection agencies.
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HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 3: Managing the Country’s Money
Steps in creating the federal budget:
 Office of Management and Budget and the president
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prepare the budget.
The prepared budget is published and sent to
Congress for study.
Congress debates the budget and makes changes.
Both houses must approve the budget.
The budget is passed with 13 appropriations bills.
Bills are sent to the president for approval or veto.
HOLT, RINEHART
AND
WINSTON
HOLT
Chapter 12
American Civics
Section 3: Managing the Country’s Money
The National Debt
 1970–1997—The government spent more than it
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collected.
Money was borrowed to make up the difference.
Interest on the borrowed money increases the debt.
Government bonds used to borrow money are being
bought by foreign investors.
Clinton plan for balanced budget in 2002 was
thwarted by recession and terrorism.
HOLT, RINEHART
AND
WINSTON