I. Taxes and Other Revenue
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Get into groups and complete the Work Sheet.
Use the textbook to find the percentages.
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Explain how the Constitution gives Congress
the power to tax and at the same time places
limits on that power.
Identify the most significant federal taxes
collected today.
Describe the nontax sources of federal revenue.
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Governments various means it uses to raise
and spend money and thereby influence the
nation’s economy
Simple
A cut in taxes means more money in the hands
of consumers and their increased spending
power means more jobs.
An increase in taxes takes money away from
the consumers and so tends to slow the
economy and reduce inflation.
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Constitution gives the government power to tax
Franklin
Why taxes? Raise money and regulate or
discourage harmful activity
Licensing is a form of taxation – guns, drugs,
hunting
Cant tax religion (1st) and only for debts, defense,
general welfare and exports.
Applied equally to all states – only one is income
tax – Civil War. Import tax
Cant tax states - fees
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“what we pay for civilized society”
Page 459 – biased paragraph?
Income tax – biggest source of revenue
Progressive tax – the higher one’s income, the
higher the tax rate
Individual income tax and corporation income tax
Bush passed major tax cuts – now 10% to 35% if
you make over $372,950.
Corporate – 15% if you make over 50,000 and 35%
if you make more than 15 million.
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OASDI – Old age, survivors, and disability
insurance (Social Security)
Medicare – healthcare for elderly
Unemployment compensation – benefits paid to
jobless workers
Payroll taxes – comes out of your check. You pay
6% and your employer pays 6% - if self-employed,
you pay 12%/Medicare is 1.5 and 3%
Regressive tax – tax is levied at the same rate – so
poor have to pay a bigger part of their salary.
Some poor have to pay more for FICA then they
do income tax
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Excise tax – sales tax, levied on gas, oil, tobacco,
alcohol and such
Called hidden, luxury or sin taxes
Estate tax on assets of someone who dies – 3.5 mil
Gift tax is on a gift from on person to another $13,000.
Custom Duties – tariffs or import tax – once the
main source of revenue
Interest – FED, canal tolls, passports, patents and
such