AGENDA Thurs 4/28 & Fri 4/29

Transcription

1 AGENDA Thurs 4/28 & Fri 4/29 QOD # 35: Best Budget Taxes/Budget Quiz Mon 5/2 Taxes People s Pie HW: People s Pie Reflection COL Project DUE: 5/2 Stock Market Project DUE: 5/9

2 QOD #35: Best Budget When making a state or federal budget what concerns you most the needs of your constituents or the financial needs/limitations of the state? Remember your constituents are the people that voted you into office. Make two T-Charts one for constituents and one for state financial needs/limitations. For each you will need to list at least two pros and two cons.

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4 Where Does the Money Go? National Defense Income Security Health Medicare Social Security Education Training Employment Social Services Net interest on National Debt Other

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6 Two Principles of Taxation benefits received principle a person should pay taxes equal to the benefit they receive from government e.g. business owners and shareholders make more use of courts, gov agencies, airports and roads [infrastructure], police and fire services ability-to-pay principle people should pay taxes according to their ability to do without the money rich people can afford to pay more than poor

7 Theories about taxation What is your fair share? Benefits-received principleperson should pay in taxes an amount equal to the benefits s/he receives from the govt. If you drive a tremendous amount you should pay high gas taxes to repair road damage. Road repair should not come out of income tax or property tax. Who should pay for the schools? Who benefits?

8 Theories of taxation Ability to pay principle- Everyone benefits from national defense. Who should pay? How do we decide who pays what? Some say it should be based on ability to pay. A rich person should pay more taxes than a poor person. If you make $1,000,000 you pay $330,000 a year in taxes whereas a person who earns $30,000 a year will pay $10000 year in taxes. Is that fair?

9 Types of taxes Progressive income tax- the more you make the more you should pay. Progressive taxes are usually capped. Federal income tax rates are progressive. Regressive income tax- people pay a lower rate as their income rises. It is a tax that takes a larger percentage from low-income people than from highincome people. Which taxes are regressive?

10 Answer Regressive taxes cigarette taxes, gasoline taxes, sales taxes (A regressive tax is generally a tax that is applied uniformly or a flat tax. This means that it hits lowerincome individuals harder. )

11 The Budget Process President prepares his budget priorities with his advisors. reflects his political beliefs and vision for the country Congress committees scrutinize the budget the Congressional Budget Office (CBO) provides non-partisan financial analysis

12 The Budget Process Congress committees scrutinize the budget works out differences with the White House works out differences between Republican and Democratic members of Congress works out differences between the Senate and House special interest lobby Congress members

13 Govt debt/deficit Budget deficit- the situation in which the federal government expenditures are greater than the federal government tax revenues. Deficits lead to a national debt. When the govt borrows money it goes into debt just like individuals. The govt borrows money by selling securities bonds to other govts in the world. Since 2003, $500 billion added debt/year 2008 = $10.7 trillion; 2012 = $15.5 trillion Current projections = $20 trillion by 2015

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15 Actual US debt What do you think the current United States national debt is? There is a debt clock in Times Square that has been keeping count of the debt since 1989.

16 The answer In September 2008, the digital dollar sign was eliminated to make way for an extra digit the "1" in $10 trillion (the national debt is was $10.2 trillion). According to the Associated Press in early 2009, plans for a new clock were announced that would make room for a quadrillion dollars of debt, yet the clock has yet to be replaced.

17 The clock According to the Treasury, the national debt has grown more than $500 billion each year since fiscal year The $700 billion government bailout sent the national debt to more than $12 trillion.

18 Federal Spending Preview Questions: If your parents kept spending money on you to keep you happy, without regard to their income, what would eventually happen to them? What if it were an elected official, spending the government s money on you? Would you be more or less likely to vote for a candidate who ran for office promising to provide more to you? Why would a candidate want to give you more? Where does the money come from? Are there any limits to as to what government can spend money on?

19 People s Pie Reflection Review your list of cuts and expenditures. Answer the following based on your decisions: Did you win the game? How or why not? What was the largest item/program in the budget you cut? Why? What was the largest item/program in the budget you kept? Why? What were your political costs? How do you justify those costs? What types of cuts would you propose for the future?