Tuesday 4/7• RAP

• What do you think

of this political cartoon?

• Today:• Movie “Dave”

Tuesday 4/7RAP

• Interpret the political cartoon on page 446, and answer the question below it.

Today:

• DAVE – movie notes

Wednesday 4/8• RAP

• Open to “Skills for life” on page 453; read Paying your taxes, answer this question as you read:

• What types of documents should you save to help you prepare your tax return.

• Today:• CE presentations

• Take notes on Ch. 16.1 and 16.2

• Watch “Dave”

Ch. 16: Financing Government

Today

• Please Take notes on Ch. 16.1 Taxes and 16.2 Nontax Revenue and Borrowing–PPT

• Read page 457 “The Meaning of a Balanced Budget” and answer the three questions on the bottom. • Answer these questions in your 16.1 and 16.2 notes.

Ch. 16.1 Taxes

• Fiscal year extends from October 1st thru September 30th.

• Power to tax:

• Article 1, section 8, Clause 1

• Gives Congress the power to tax in order to raise money needed to operate the Federal Government.

• Constitutional limitations:

• Congress must exercise the taxing power in accord with the Constitution.

• Four expressed limits:1.Taxes must be used for public purposes only.

1.Not for the benefit of private interests.

2.Prohibition of export taxes.

1.Tariffs can be applied only to imports –goods brought into the U.S.

3.Direct taxes must be equally apportioned, or distributed.

1. Income taxes

2. Indirect taxes, initially placed on the distiller, but then is put on the person. (liquor)

4. Indirect taxes, such as duties and imports, must be levied at the same rate in all parts of the country.

• Implied Limitation:• Federal taxes cannot be imposed on state governments when

they are performing such tasks as providing public education, furnishing health care, or building streets and highways.

• McCulloch v. Maryland, in 1819, declared that “the power to tax involves the power to destroy.”

• The federal government could tax the state out of existence and so destroy the federal system.

• The federal government does tax state and local activities that are of a nongovernmental character; liquor.

• Current Federal Taxes:• Individual income tax: largest source of federal revenue., 1913

• Corporation income tax: must pay a tax on its net income, all earnings above the costs of doing business.

• Social insurance taxes: collected to fund Social Security program, Medicare, and unemployment compensation.

• Excise tax: tax laid on the manufacture, sale, or consumption of goods, and /or the performance of services.

• Estate and gift tax: levy imposed on the asset of one who dies; one imposed on the making of a gift by a living person.

• First 675,000 of an estate is exempt.

• Up to 10,000 in t ax free gifts in one year.

• Custom duties: tax laid on good brought into the US from abroad.

• Tariffs, import duties, or imposts.

• Taxing for nonrevenue purposes:• This purpose is to regulate and even discourage some activity

that Congress thinks is harmful or dangerous to the public.• Narcotics

• Certain firearms

• Hunting of migratory birds

• Gas-guzzling cars

• Etc.

Nontax revenues and borrowingCh. 16.2

• Nontax Revenues:• Interest is a charge for borrowed money.

• Canal tolls

• Fees for passports

• Copyrights, patents, and trademarks.

• Seigniorage: profit the US Mint makes in the production of coins.

• United States Postal Service: generates nontax revenue for the government by selling mint-condition stamps to collectors. $100 million each year.

• Borrowing:• The government often borrows money for:

• Costs of short and long term crisis situations

• Finance large scale projects that could not be paid for out of current income.

• WWI

• Great Depression

• WWII

• Congress must authorize all federal borrowing.

• Borrowing is done by the Treasury Department.

• They issue securities to investors (banks, individuals, etc.)

• Government borrows at low interest rates.

• Public Debt: • Result of the Federal Government’s borrowing over

many years.• It is the government’s total outstanding indebtedness.

• All of the money borrowed, and not yet repaid, plus the accrued, or accumulated, interest.

• US DEBT CLOCK

• Debt more than doubled in the years 1981 thru 1985 because of deficit financing.

• By 1992 deficit spending had quadrupled the debt.

• There is no constitutional limit on the amount that may be borrowed, and so there is no constitutional limit on the public debt.

• There is a ceiling that congress has put, but they adjust it as needed.

• Should future generations be worried?

Dave

• Get out your notes for “Dave”

Thursday 4/9RAP

What suggestions do you have to help with the debt? Explain

Today:

• Begin reading Ch. 16.3 and completing the questions on the handout. –Turn in to “inbox”

• Finish Dave – last 20-30 minutes

Friday 4/10RAP

• Could a situation like the movie “Dave” ever happen?• Explain.

Today:

Readings on deficit and debt.

answer questions

A Guide to the Federal Budget Deficit and National Debt

• Groups will address the debt and deficit• Individually students will read the hand out on the debt and deficit,

• after each section please summarize it in your notes with your partner;

• at the end of the reading please answer the three individual questions on the reading.

• Also, answer the individual questions in the box on how you would handle the debt –where to cut.

• Monday:• In groups, students will solve the debt and deficit problem.

• Groups will write their response on a poster and present it to class.

Monday 4/13RAP

• How would you solve the debt and deficit problem?• Explain.

Today:

• Finish group work—• Discussion questions with group– and create poster…then present to class.

• Turn in Ch. 14, 15, and 17 handout

• Study for test

Tuesday 11/18

RAP

• Is your group ready to present you solution or plan to help the debt and deficit?

Today:

• Present plans for the debt and deficit.

• Read Ch. 17.1 and complete the section assessment.

Debt and Deficit

• In your groups, please have one person write the answers to the group discussion (B) question.• C. Create a poster for your group on how you would handle the

debt and deficit.

• Please be specific and be able to explain why you would cut or not cut; increase or decrease taxes, etc.

Please open your book to page 457

• Please read this page, and with your group, create two charts with one describing the advantages of such an amendment and the other discussing the disadvantages of it.

• Share with the class your charts.