1. TAX BASES & STRUCTURES

2. Most Common Tax Bases Individual income tax Corporate income tax Sales tax Property tax

3. Individual Income Tax Tax based on an individual’s income from all sources

4. Corporate Income Tax Tax based on a corporation’s profits

5. Sales Tax Tax based on the value of goods or services at the time of sale. http://www.tax.ny.gov/pdf/publications/sales/pub718.pdf http://www.earthodyssey.com/sales_tax.html

6. Property Tax Tax based on the value of an individual’s or business’s assets, generally real estate.

7. Proportional Tax Takes the same % of income from all taxpayers regardless of how much they make “FLAT TAX”

8. Progressive Tax Places a higher % rate of taxation on higher-income earners The Federal Income tax

9. Regressive Tax Takes a larger % of income from people with lower incomes SALESPROPERTY

10. Why tax incentives? The gov’t may encourage behavior that it believes is good for the economy and for society http://thehotellafayette.com/

11. What is a sin tax? Taxes imposed on products or activities considered to be unhealthful or damaging to society

12. Withholding Money taken from a worker’s pay before the worker receives it Also called the payroll tax

13. Ability-to-pay Principle People with higher incomes not only pay more in total taxes but also pay a higher percentage of their income in taxes

19. National Debt

20. What is national debt? The total amount of money that the government owes National Debt = Sum of annual budge deficits – any budget surpluses or other payments against the debt Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding 12/31/1211,581,517,550,395.074,851,212,500,174.0516,432,730,050,569.12

21. $16,439,519,291,252.22 The estimated population of the United States is 314,176,428, so each citizen’s share of this debt is $52,325.75! The National Debt has continued to increase an average of $3.86 billion per day since Sept. 28, 2007! http://www.brillig.com/debt_clock/faq.html

23. What is deficit spending? A government spends more than it collects in revenue

24. How is money raised for deficit spending? Treasury Bills – mature in less than 1 year Treasury Notes – mature in 2-10 years Treasury Bonds – mature in 30 years Trust Funds – S.S., medicare, medicaid Interest paid on all w/ higher interest rates on those with longer maturity dates

25. In 1981 national debt was _______% of GDP (______% privately owned) In 2006 national debt was _______% of GDP (less than _______% privately owned) 33 80 68 60

26. Effects of Debt POSITIVE When government spends to stimulate the economy NEGATIVE Gov’t competes w/ the private sector for investments With more debt, the gov’t is just repaying interest

27. Top 10 U.S. Creditors China  $906.8 billion Japan  $877.4 billion England  $477.6 billion Oil exporters (OPEC)  $213.9 billion Brazil  $177.6 billion Hong Kong  $139.2 billion Caribbean banking centers  $133.7 billion Russia  $131.6 billion Taiwan  $131.2 billion Canada  $125.2 billion

28. The following are the top ten creditors to the USA as of March, 2009: (Amt. in Billions) 1.China 767.90 2 2.Japan 686.70 3 3.Caribbean Banking Centers 213.60 4 4.Oil Exporters 192.00 5 5.Russia 138.40 6 6.United Kingdom 128.20 7 7.Brazil 126.60 8 8.Luxembourg 106.10 9.Hong Kong 78.90 10.Taiwan 74.80