Module 5 Flashcards
There is no process outlined in the constitution for creating a budget or plan for the government?
True
Enumerated powers
Granted to congress as outlined in article 1 section 8 of constitution
Implied powers
Powers authorized by the constitution that, while not stated, seem implied by powers that are expressly stated.
In the constitution, the presidents only role in the funding process is signing and vetoing funding bills?
True
Federal Fiscal year
October 1
Most states fiscal year starts
July 1, fits into school year
Describe the budgeting process
1) The president works with cabinet officers to create a budget proposal, submitting to congress by February.
2) Congress divides the budget into 12 parts. Committees make recommendations to congress by April, finished before October.
3) if congress doesn’t finish, or president vetoes, there is a) continuing resolution b) government shutdown
The Constitution requires the budget to balance?
False
Sequestration
Sets limits on some spending and requires across the board cuts if congress cannot agree
Paygo
Pay as you go. New programs must be paid for as you go. From Budget Enforcement Act you f 1990
Types of government spending
1) mandatory spending
2) interest on national debt
3) discretionary spending
Mandatory spending
Already set by law
Social security, Medicare, federal retirement
What are some examples of clearly enumerated powers in the constitution?
- Establish post office and roads
- fund Supreme Court and lesser federal courts
- fund army, navy, state militias
- coin money
- protect intellectual property
What are some examples of flakey enumerated powers??
- regulate commerce
- regulate tue value of money
- deal with pirates
- “necessary and proper” for all the powers, provide for the general welfare
US is a __________ system. Many countries are ___________.
Federal
Unitary
Article 1 section 8
The congress shall have the power to lay and collect taxes, duties, imposts, and excises but all shall be uniform throughout the United States.
Article 1 section 9
No capitation or other direct tax shall be laid unless in proportion to the census or enumeration herein before directed to be taken
No tax or duty shall be laid on articles exported from any state
16th amendment
The congress shall have the power to lay and collect taxes in incomes from whatever source derived without apportionment among the several states and without regard to any census or enumeration
Article 1 section 10
No state shall without the consent of congress lay any imposts or duties on imports or exports except what may be absolutely necessary for executing its inspection laws.
No state shall without the consent of congress lay any duty on tonnage
Earmarked tax
Tax tied to a specific function
Ex. Gas tax is earmarked for roads
Tax incidence
Refers to who actually pays for a tax
Shifting
Person or business who pays the government gets the money from someone else who pays the true cost
Excises
An excise tax is placed on a good or service.
Can be a general tax like the sales tax, or a specific tax like the gasoline tax
Value added tax (VAT)
Tax included in the price of the good.
Imposts/Duties
Tariffs - taxes on imports
Nexus
Connection. Historically businesses only collected taxes from customers in states where they had a physical presence, employees, etc.
McCulloch vs Maryland (1819)
In our federal system One level cannot tax the other level.
Ex. State of Nevada cannot tax the government
Income effect
An increase in price is effectively a decrease in your income
Substitution effect
When the price of a good rises, we substitute other, cheaper, goods when possible
An increase in sales tax would lead to a shift in __________
Supply
Elastic Demand
When consumers are sensitive to price
When demand is __________, businesses find it hard to raise the price and so will eat the tax
Elastic
Inelastic Demand
When consumers are insensitive to price
When demand is _________, the business can pass the tax on to the consumer.
Inelastic
Progressive tax
Takes a larger percentage of income as income rises
Ex. Income tax
Proportional tax
Takes the same percentage of income regardless of income
Ex. Corporate profit tax
Regressive tax
Takes a lower percentage of income as income rises
Ex. Sales taxes, property taxes taxes, social security taxes
States fiscal year
July 1 (coincides with school year)
Federal System
Multiple levels of government
Unitary System
1 level of government
“Fiscal Year” means
Budget year
