6.3 Financing and Spending
the Budget
Do Now:
Who should pay?
Financing the Budget
Income Tax-Constituents pay tax based on income
Progressive Tax-Tax that increases as income increases
Regressive Tax-Tax that increases as income decreases
Flat Tax-Tax born equally independent of income
Tax Return-The official declaration of a constituents
income, exemptions, and deductions
Financing the Budget
Corporate Income Tax-Tax on the net income of businesses
Payroll Taxes- Social Security, Medicare, Unemployment
Excise Tax-Taxes on the sale/consumption of specific goods
Estate Tax-Tax imposed on a dead person’s assets
Gift Tax-Tax imposed on gifts over $13,000 in value
Custom Duty-Tax imposed on imported goods
Creating the Budget
1.
Agencies send budget estimates to the President’s
Office of Management and Budget.
2. The OMB and president review and revise the budget.
3. The Budget Committees in congress review the budget
with the help of the Congressional Budget Office.
4. Then both houses must pass a joint resolution affirming
the budget.
The Budget
Interest-Charges for borrowing money
Deficit-Yearly shortfall between income and spending
Surplus-Yearly overage between income and spending
Public Debt-All outstanding debts of the Government
Entitlements-Federal benefits paid to eligible parties
Discretionary Spending-Congress determines every year
Mandatory Spending-Spending built into gov’t programs
Spending the Budget
So where exactly does all of the money go?
The Debt
When you spend more than
you earn, you end up in debt!
The Debt
“A national debt, if it is not
excessive, will be to us a
national blessing.”
Alexander Hamilton
The Debt
So who owns our debt?
6.3 Assignment
Who should bear the burden of
financing the government?
Everyone evenly or some more than
others?
And
Is debt good/bad for our country?
Who should own it?
Spend less or tax more?