The Federal Budget Flashcards
what is the federal budget?
a comprehensive management of the government’s spending, revenues, and borrowing.
What taxes does the federal government collect?
Income tax, Payroll tax, Corporate income tax
Which tax brings in the most money?
Income tax
What is a progressive tax?
An income tax in which the proportion of money owed to the government increases as the amount to be taxed increases
What did the 2017 tax cut do for tax
rates?
Reduced corporate income tax from 35% to 21%
Who pays the most of the federal taxes
the rich (The second “the rich” answer)
the costliest tax breaks are to___
encourage employers to buy health insurance for their employees,
save for retirement and buy a home.
What is the difference between mandatory and discretionary
spending?
Mandatory Spending: (65%) spending required by law on people who qualify (“entitlements”) plus interest on debt
Discretionary spending: (35%) spending that congress can increase or decrease each year
What are the two largest and most expensive federal programs?
Social Security, Defense
What is the most expensive
discretionary spending program?
Defense
What are deficits?
Gaps between revenue (taxes) and spending
What is the national debt?
Accumulation of past deficits
tax rates have fallen for___
The rich
Why is it difficult to
reduce the federal debt?
Because no one wants to balance budget because they will loose next election
What do voters want from government in terms of taxes and spending?
Voters want both tax cuts and more spending
