Chapter 14: Taxes<br />Economics CP<br />
Chapter 14 Section 1 <br />
Depending on the elasticity of an item, different groups pay the tax<br />Taxes cause the cost of supplying a good to incr...
The supply/ demand graph tells us:<br />Inelastic supply: consumer pays most of the tax<br />Elastic supply: business pays...
Tax = payment to gov’t<br />Federal Tax Basics<br />
Tax Return determines income tax<br />Taxable income = income – (exemptions (b/c of dependents) + deductions (amts. you ca...
Corporate Income Tax<br />Complicated although progressive!<br />Types of Federal Taxes<br />
Social Insurance Tax<br />FICA (Federal Income Contribution s Act) funds Social Security, Medicare, & unemployment<br />Ex...
Estate & Gift Tax<br />Estate – what deceased left behind; progressive; for the wealthy<br />Gift – created so estate tax ...
Import Taxes/ tariff<br />Types of Federal Taxes<br />
Chapter 14 Section 3<br />
Gov’t has taxes and revenue ($ from non-tax sources) to spend<br />Gov’t Spending Divided Among 2 Categories<br />Fed. Gov...
<ul><li>Mandatory (has to)
Entitlement programs – benefits people receive b/c they qualify
(Don’t write) Entitlements are like MC Hammer’s song … you can’t touch this!
Discretionary (optional)
½ available does to defense
Examples: education, research, student loans, national parks/ monuments, law enforcement, disaster aid, foreign aid, farm ...
Chapter 14 Section 4<br />
Operating: day to day expenses (MUST BE BALANCED)<br />Capital: major investments & spending (FINANCED BY MUNICIPAL BONDS)...
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Chapter 14 powre point

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Chapter 14 powre point

  1. 1. Chapter 14: Taxes<br />Economics CP<br />
  2. 2. Chapter 14 Section 1 <br />
  3. 3. Depending on the elasticity of an item, different groups pay the tax<br />Taxes cause the cost of supplying a good to increase, therefore supply decreases<br />Who bears the burden of taxes?<br />
  4. 4. The supply/ demand graph tells us:<br />Inelastic supply: consumer pays most of the tax<br />Elastic supply: business pays most of the tax<br />Burden of Taxation Graph<br />
  5. 5. Tax = payment to gov’t<br />Federal Tax Basics<br />
  6. 6. Tax Return determines income tax<br />Taxable income = income – (exemptions (b/c of dependents) + deductions (amts. you can subtract)<br />Deductions used as incentive (ex. Purchasing a house; purchasing an energy efficient car)<br />Due to IRS April 15!<br />Personal Income Tax<br />“pay as you earn” – gov’t constantly has bills to pay & lump sum difficult to pay<br />Therefore, tax money “withheld” – taken before you can spend it<br />Types of Federal Taxes<br />
  7. 7. Corporate Income Tax<br />Complicated although progressive!<br />Types of Federal Taxes<br />
  8. 8. Social Insurance Tax<br />FICA (Federal Income Contribution s Act) funds Social Security, Medicare, & unemployment<br />Excise Tax<br />Tax on certain goods<br />Sometimes used as “sin tax” to discourage behavior or gain revenue from nonessentials<br />Types of Federal Taxes<br />
  9. 9. Estate & Gift Tax<br />Estate – what deceased left behind; progressive; for the wealthy<br />Gift – created so estate tax could not be avoided; tax on items given<br />Types of Federal Taxes<br />
  10. 10. Import Taxes/ tariff<br />Types of Federal Taxes<br />
  11. 11. Chapter 14 Section 3<br />
  12. 12. Gov’t has taxes and revenue ($ from non-tax sources) to spend<br />Gov’t Spending Divided Among 2 Categories<br />Fed. Gov’t Spending<br />
  13. 13. <ul><li>Mandatory (has to)
  14. 14. Entitlement programs – benefits people receive b/c they qualify
  15. 15. (Don’t write) Entitlements are like MC Hammer’s song … you can’t touch this!
  16. 16. Discretionary (optional)
  17. 17. ½ available does to defense
  18. 18. Examples: education, research, student loans, national parks/ monuments, law enforcement, disaster aid, foreign aid, farm subsidies, civilian workers</li></ul>Federal Gov’t Spending<br />
  19. 19. Chapter 14 Section 4<br />
  20. 20. Operating: day to day expenses (MUST BE BALANCED)<br />Capital: major investments & spending (FINANCED BY MUNICIPAL BONDS)<br />State budgets<br />
  21. 21. Education! Biggest expense b/c federal gov’t doesn’t<br />Public safety<br />Highways & transportation<br />Public Welfare<br />Arts & Recreations<br />Administrator’s salaries<br />State Expenditures<br />
  22. 22. Has to be creative<br />Can’t tax imports/ exports<br />Federal Gov’t has a large income tax<br />Solution = sales tax!<br />Taxes & State Gov’t<br />
  23. 23. Sales tax<br />Income tax – varied in handling by state; less than Fed. Tax<br />Corporate income tax – low to entice corp. <br />Other – licenses, fines<br />Sources of State Taxes/ Revenue<br />
  24. 24. towns, cities, townships, school districts, counties<br />Local Gov’t Spending & Taxes<br />
  25. 25. Local Gov’t<br />

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