Chapter 13

Question 1

What two congressional committees (house and senate) write the tax codes

Answer 1

House ways and means committee

Senate finance committee

Question 2

What is a flat tax

Example

Answer 2

Everyone pays same percentage

Go out to lunch - pay same sales tax

Question 3

What is progressive tax

Answer 3

Income tax

Based on ability to pay

Question 4

What are four sources of federal revenue

Answer 4

Personal income tax
Corporate tax
Social insurance tax (social security)
Excise tax (sin tax)

Question 5

Which source of federal revenue is not major

Answer 5

Excise tax (sin tax)

Question 6

What percent of the national budget goes to pay federal debt

Answer 6

6%

Question 7

What is the national debt to the nearest trillion

Answer 7

$18 trillion

Question 8

What item/area makes up for the largest portion/expenditure of the federal budget

Answer 8

Income security expenditures

Aka social security

Question 9

Who pays for social security taxes

Answer 9

Employees and employers

Question 10

What is entitlements

Answer 10

X levels of benefits

Y # of recipients

Question 11

Examples of entitlement

Answer 11

Social security
Medicare
Veterans benefits
Agriculture subsidies

Question 12

Amendment that allowed the federal government to levy an income tax

Answer 12

16th amendment

Question 13

Politics of budgeting

Answer 13

Agencies in government work to protect their interest over the budget

Members of congress act as policy entrepreneurs to support constituent benefits

Presidents try to use budgets to manage economy

State politicians request grants-in-aid to assist local economies

Question 14

Revenue

Answer 14

Money government receives from taxes

Question 15

Expenditures

Answer 15

Government money

Question 16

Uncontrollable expenditures

Answer 16

Government spending determined by how many beneficiaries there are for a program (social security)

Question 17

Military-industrial complex

Answer 17

Close relationship between military and defense industry and government

Question 18

Procurements

Answer 18

Purchasing of military hardware

Question 19

Tax expenditures

Example

Answer 19

Revenue losses (deductions)

Homeowners ability to deduct mortgage interest

Question 20

Deficit

Answer 20

Excess of federal expenditures over federal revenue

Question 21

Loopholes

Answer 21

Tax expenditures
Business related deductions
Tuition tax credits
Lower tax rates on stock profits and real estate

Question 22

Continuing resolutions

Answer 22

Allows agencies to continue spending if congress does not pass appropriation bills

Question 23

Reconciliation

Answer 23

Congressional process where program authorization are revised to get required savings

Question 24

Incrementalism

Answer 24

Last years budget plus a little bit more

Question 25

National debt

Answer 25

Money borrowed but not yet rapid

Question 26

What is one major negative consequence of a large national debt

Answer 26

Makes US more dependent on foreign investors

Question 27

Why have national budgets grown

Answer 27

National security state (defense spending)

Social service state (welfare, health care, education)

Question 28

What are the four means by which the budget might be reduced

Answer 28

Raise taxes
Cut spending
Grow economy
create jobs/new sources of revenue