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Federal Spending

This document outlines the structure of federal and state spending, explaining the distinctions between mandatory and discretionary spending. It delves into various types of taxes, including federal income tax and excise tax, providing examples and definitions. Additionally, it discusses the primary entitlement programs funded by mandatory spending, such as Social Security and Medicare. The quiz format encourages comprehension of these topics, ensuring that readers grasp the essential aspects of government taxation and expenditure while emphasizing the importance of balancing budgets at the state level.

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Federal Spending

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Presentation Transcript

  1. Federal Spending January 6, Twenty-Ten

  2. QUIZ – half sheet of paper • What are the restrictions on a tax? • What kind of tax is the Federal Income Tax? • What is an excise tax? Give an example of an excise tax. • What is a W-4 form? • What two things does FICA taxes use money on?

  3. How does the government spend its money? • The government earned 2.1 Trillion dollars in 2009, but almost 75% of that must be spent on necessities for the people. • Government spending is grouped into two main categories… • Mandatory Spending - • Discretionary Spending

  4. Mandatory Spending • Mandatory Spending – spending on programs that are required by law – 68%. • Most of this money is used for Entitlement Programs – a social welfare program providing benefits to people who meet certain eligibility requirements • Social Security – is primarily a social insurance program providing social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others.(wikipedia.org, 1.6.2010) - more then 50M retired/disable people receive it • Medicare –Pays for doctors costs for ppl over 65/disabled – serves 40M+ • Medicaid– entitlement program – benefits low-income families, ppl w/disability, and elderly IN NURSING HOMES. • Other – Food stamps, Veterans programs etc, Welfare, Disability, unemployment • Mandatory spending has been increasing

  5. Discretionary Spending • Discretionary Spending – Government planners have choices on what to spend this money on • ½ of this money - Defense • Weapons, salaries, vehicles • 4% - Education • Student Loans • National Parks • Law Enforcement • Gov Salaries • Research etc.

  6. Federal Aid to the States • 346M a year is divided between the states • Gov’t tries to be “thrifty” with this to help states that need it the most • Louisiana and Katrina • New York and 9/11 • States our often “bribed” to get the money • Lowering drunk driving levels to get federal funding. • Educational reform for money

  7. State Taxes • Must have a balanced budget • Cannot spend more than you take in • What taxes must be spent on • Education – 1 university, 1 CC, public schools • Public Safety – jail • Roads – highways • Public Welfare – hospitals, water/air testing • Arts and Recreation – museums, parks • Administration – pay people in gov.

  8. State Taxes • Where do they get the money? • Sales tax – 6% in MI • State income tax • Other – license, permits • Tobacco Taxes • Local taxes • Property Taxes – BIGGEST fund of public education

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