Unit 7 Flashcards
Benefits received
Those who benefit from a govt service must pay that proportion
Progressive tax
You are taxed based on your income the higher it is the more you’re taxes
Proportional tax
Taxes that are the same % for all taxpayers
Regressive tax
Taxes that have more of a negative impact on lower incomes
Sin tax
Taxes on a item that is considered harmful ex tobacco
Ex of ability to pay
Property tax
Ex of benefits received tax
Road tolls
Ex of progressive tax
Sales tax
Two examples of regressive tax
Cigs and alcohol
Three major sources of revenue for the Feds
Income sales tax and property tax
What federal agency is responsible for collecting taxes each year and what month are they due
IRS and April
Mandatory spending
Spending on programs is required by law
Discretionary spending
Spending programs that the govt can make choices about
Entitlement programs
Social welfare programs that people are entitled to if they meet certain eligibility requirements ex social security
Two major mandatory spending programs
Social security and Medicare
Two examples of discretionary spending
Military education
Three largest categories of spending for the Feds
Military govt education.
Diff between federal deficit and federal debt
federal deficit is the money the govt brings in and spends the federal debt is the total amount the govt borrows to cover the deficits
How big is the national debt
18.7 trillion
How does the govt finance the debt
Sells saving bonds to public to borrow the money
Diff between public and intragovernment debt
Public debt is from individuals banks and foreign countries intragovernment debt is from trust funds
Who do we owe the most money to
Us
What are possible solutions to dealing with deficits and debt
Cutting programs and raising taxes
Ability to pay
People are taxed based on their ability to pay
