Post on 12-Jan-2016
Fiscal Policy• Fiscal Policy – government policy toward taxing &
spending.Federal Budget
• Prepared annually by the President• Approved by Congress • Budget Year – October 1 – September 30
Government Spending• Mandatory Spending – does not need annual approval.• Discretionary Spending – needs annual approval.
Types of Taxation• Progressive Tax – tax that takes a larger percentage
from the wealthy• Regressive Tax – tax that takes a larger percentage
from lower incomes• Proportional Tax – tax that takes the same percentage
from all incomes.
GOVERNMENT BUDGET
Government Revenue - $ that government has to operate. Taxes, fines, user fees, etc…
Government Expenditures - $ the government must spend on programs it operates.
Balanced Budget – Revenue = Expenditures
Budget Surplus - Revenue > Expenditures
Budget Deficit - Revenue < Expenditures
National Debt – Accumulation of Budget Deficits
Federal Government Revenue
Federal TaxesIncome Tax - #1 source of government revenue.
Progressive tax on individual earning.
Payroll Tax – 2nd largest source of income
Corporate Income Tax – up to 36% of profits.
OTHER FEDERAL TAXESExcise TaxEstate TaxLuxury Tax
Social Security Tax
Federal Government Expenditure
Social Security – 21.2%National Defense – 17.4 %
Income Security – 14%Medicare – 13.5 %
Health – 10.5%Interest on Debt – 8.2%
Other – 15.2 %
State Government
• Intergovernmental Revenue - $ paid from one level of government to another. States get it from the federal government.
• Sales Tax – Paid by retail stores to the state government. (passed onto consumers)
• Income Tax – taken from workers paychecks.
• Excise Tax – Alcohol, tobacco, & gasoline.
Local GovernmentREVENUE
•Intergovernmental Revenue – paid by the state government to local governments.
• Property Tax – paid on land, houses, automobiles, etc…
EXPENDITURESEducation
Police & Fire ProtectionWater Supply
Sewage & Sanitation
FEDERAL INCOME TAX TABLE
TAX RATE SINGLE MARRIED
10% $0-$8,025 $0-$16,050
15% $8,025-$32,550 $16,050-$65,100
25% $32,550-$78,850 $65,100-$131,450
28% $78,850-$164,550 $131,450-$200,300
33% $164,550-$357,700
$200,300-$357,700
35% Over $357,700 Over $357,700