Economics-in-Marketing CTE Lesson Plan Government Revenue and Services Lesson Title Lesson Objective At the completion of this lesson, students will be able to analyze how governments generate revenues through taxes to provide essential services. Concepts CTE Concept(s) Business taxes, sales tax, public services Economic Concept(s) Local and state revenue sources, public services Standards/Benchmarks Michigan Career and Technical Education Segment 12 I.D.4 Acquire knowledge of the impact of government on business activities to make informed economic decisions. Michigan Department of Education High School Content Expectations Social Studies: Economics 1.4.3 Government Revenue and Services. Analyze the ways in which local and state governments generate revenue (e.g., income, sales, and property taxes) and use that revenue for public services (e.g., parks and highways). Note: the bulk of these benchmarks are taught in Civics this should be a brief review. Student Handout1 Student Handout Answer Key 1 Student Handout 2 Student Handout Answer Key 2 Student Handout 3 Student Handout 4 Student Handout 5 Teacher Resource 1 Supplies Needed Where Does the Money Go? (1 per student) Where Does the Money Go? Key The Circular Flow of the U.S. Economy (1 per student) The Circular Flow of the U.S. Economy Key Compare and Contrast Where the Money Goes Mayor of the Month Mayor of the Month Rubric Where Does the Revenue Go? Berrien RESA 1 Economics in Marketing Education
Economics-in-Marketing CTE Lesson Plan 1. Introduce the CTE lesson. [Grading is left to the discretion of the teacher.] Teacher Resource 1: Where Does the Revenue Go? Discussion #1: Ask students what the sales tax rate is in Michigan. Answer: Six percent. Discussion #2: Why does Michigan, and many other states, collect sales tax? Possible Answers: Student responses may vary widely but should focus around providing services for the people in the state. A. Using a document projector share with students the infographic on Teacher Resource 1: Where Does the Revenue Go? B. Share with students that the revenue generated provides services to the public. 1. Almost 75% of the sales tax funds their education (K-12 education) 2. Approximately 15.9% goes to the general fund which finances state government 3. Approximately 10% goes to local governments that provide services in local communities 4. About 1% supports public transportation and freight systems 2. Assess students economic awareness as it relates to the CTE lesson. Student Handout 1: Where Does The Money Go? Student Handout 1 Answer Key: Where Does the Money Go? A. Distribute Student Handout 1: Where Does the Money Go? Ask students to write down their own definitions for the vocabulary terms listed. Use Student Handout 1 Answer Key: Where Does The Money Go? to provide the correct definitions. Have students write down the correct definitions. 1. Ask students what the term revenue means. Answer: The money a business receives from customers who buy its goods and services. Not to be confused with profit. 2. Ask students what the term government revenue means. Answer: The money a government receives from taxes and fees. Berrien RESA 2 Economics in Marketing Education
3. Ask students what the term public services means. Answer: Services provided by a local, state or national government. B. Draw a t-chart on the board. On the left side write Local and State Revenue. On the right side write Public Services. C. Give students 3-5 minutes to generate examples. Use Student Handout 1 Answer Key: Where Does the Money Go? to fill in the correct responses. 3. Work through the economic lesson as it is embedded in the CTE lesson. Student Handout 2: The Circular Flow of the U.S. Economy Student Handout Answer Key 2: The Circular Flow of the U.S. Economy A. Using Student Handout Answer Key 2: The Circular Flow of the U.S. Economy discuss the following: 1. The United States economy is a complex and multifaceted economy. This model was developed to simplify the economy and to give students an opportunity to examine how the government works. This model will also allow students the opportunity to understand where the money comes and goes in the economy. Students will gain an understanding of the revenue patterns in the United States economy as you review this diagram. Review this concept to help students understand how the government obtains revenue to pay for services that are needed in the society. B. Distribute Student Handout 2: The Circular Flow of the U.S. Economy. Students will use this worksheet to take notes. Explain to students that this diagram is a representative of the three main revenue sources for the United States market economy. Economists use this circular flow model to explain the interactions between the three sectors. Explain the three sectors; households, businesses and the government. Each sector of the economy contributes to the others to ensure that revenue is generated and distributed to provide goods and services. 1. Emphasize the principal economic characteristics and activities of each of the three sectors. Also, mention that the circular flows model involves the full interaction of the sectors, and that any change in one sector may trigger changes in other sectors. The model will allow students to trace the effects of these changes and to draw conclusions. 2. Demonstrate the interdependence of the economic and financial activities of each sector by following the arrows and explaining the services or revenue that occurs. Explain that when households purchase goods and services from sellers, this will in turn spark additional flows such as tax payments to the government sector and borrowing from financial institutions. All of the economy's flows of financial and economic activities are related. When one or more of the flows is altered, the overall performance and health of the economy may change as well. 4. Work through related, contextual economic-in-cte examples. Berrien RESA 3 Economics in Marketing Education
A. Distribute Student Handout 3: Compare and Contrast Where the Money Goes 1. Using the information from the diagram, students will analyze allocation of funds from the total revenue. Students will analyze how much and where it goes. 5. Work through traditional economic examples. Student Handout 3: Compare and Contrast Where the Money Goes? A. Refer to Student Handout 3: Compare and Contrast Where the Money Goes? Using the information from the diagram students will analyze allocation of funds from the total revenue. Students will analyze how much and where it goes. 1. What percentage of state and local revenue comes from property tax? 2. What percentage is derived from individual income tax? 3. What percentage of sales goes to education? 4. How much comes from general sales tax and gross receipts? 5. What percentage supports public assistance? 6. Students demonstrate their understanding. A. Divide class in half. One half will research local taxes and spending and one group will research state taxes and spending. Tell students to do their own research. 1. Students are to research the following: Local government team: What taxes or fees are collected by your local government (City, village, township, county) from What taxes or fees are collected by your local government (City, village, township, county) from What services does your local government (City, village, township, county) provide? What is your local government s budget (City, village, township, county) for the year? State government team What taxes or fees are collected by your state government (City, village, township, county) from Berrien RESA 4 Economics in Marketing Education
What taxes or fees are collected by your state government (City, village, township, county) from What services does your state government (City, village, township, county) provide? What is your state government s budget (City, village, township, county) for the year? 2. Once individual lists are generated have like groups meet to generate one master list of taxes and fees, services, and budget. 3. Once the master list is generated have each group share their list with the other group. 7. Formal assessment. Student Handout 4: Mayor for a Month Student Handout 5: Mayor of the Month Rubric Distribute Student Handout 4: Mayor for a Month and Student Handout 5: Mayor of the Month Rubric A. Imagine that you are the Mayor of a city named Reality. In previous years, Reality has received an $80,000 grant from the federal government to help support certain public services. Congress has recently voted to reduce this funding to $50,000 next year. One of your primary goals as mayor is to avoid cutting services. Together, you and several city council members, have proposed various ways to raise additional revenue. Some have proposed increasing property taxes. Others want to increase the local sales tax from 4 percent to 5 percent. Another proposal is to charge individual income taxes at a flat rate of 2 percent. How will each proposal affect the taxpayers of Reality? Calculate the following: 1. If a family s taxable earnings are $50,000 per year, how much local income tax will the family pay with the new proposal? 2. Under your new proposal, how much additional tax will a consumer pay on $6,000 per year on taxable items? 3. Write a paragraph outlining the pros and cons of your plan as mayor. (See rubric for written response.) Berrien RESA 5 Economics in Marketing Education
Standards Government Revenue and Services Lesson Title Lesson Objective At the completion of this lesson, students will be able to analyze how governments generate revenues through taxes to provide essential services. Standards/Benchmarks Michigan Career and Technical Education Segment 12 I.D.4 Acquire knowledge of the impact of government on business activities to make informed economic decisions. Michigan Department of Education High School Content Expectations Social Studies: Economics 1.4.3 Government Revenue and Services. Analyze the ways in which local and state governments generate revenue (e.g., income, sales, and property taxes) and use that revenue for public services (e.g., parks and highways). Note: the bulk of these benchmarks are taught in Civics this should be a brief review. MBA Research Performance Indicators Describe the nature of taxes (EC:072) (SP) Berrien RESA 6 Economics in Marketing Education
References Econedlink: Council for Economic Education. (n.d.). Economic Glossary. Retrieved from http://www.econedlink.org/economic-resources/glossary.php Michigan Sales Tax: Where Does the Revenue Go? Retrieved from: http://www.mlive.com/politics/index.ssf/2013/02/michigan_sales_tax_where_does.html Shutterstock. (n.d.) Photos. Retrieved from http://www.shutterstock.com/ U.S. Bureau of Labor and Statistics. (2014). BLS Reports. Report 1046: Consumer expenditures in 2012. Retrieved from http://www.bls.gov/cex/csxann12.pdf Berrien RESA 7 Economics in Marketing Education