Ch 12 outline - Chapter 12 outline: I. A Financial Overview...

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Chapter 12 outline: I. A Financial Overview of the U.S. Government A. Figure 1 shows the level of government revenue in the United States, including  federal, state and local governments, as a percentage of total income for the U.S.  economy. B. Table 1 compares the tax burden for several major countries, as measured by  the central government’s tax revenue as a percentage of the nation’s total  income. 1. The United States falls in the middle of the list. 2. Tax burden in the United States is low when compared with that of  European countries, but is high when compared with that of other areas  of the world.   C. The Federal Government 1. Receipts a. Table 2 reports the receipts of the federal government in 2001. b. Total receipts were $1,991 billion or $6,986 per person. c. The largest source of revenue is the individual income tax. d. A family’s income tax liability is how much it owes based on  income.  This tax is not proportional to income.  It is based on  income minus deductions, and the tax rate rises as income rises.  Table 3 presents federal tax rates for 2001. e. Other important revenue sources include social insurance taxes,  the corporate income tax, and excise taxes. 2. Spending a. Table 4 reports where the federal government spent its budget in  2001. b. Total spending was $1,864 billion or $6,540 per person.
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c. The largest category of expenditure is Social Security.  The  second largest expense is national defense. d. Other important categories of expenditure include income  security programs, net interest on the federal debt, and  Medicare. 3. Definition of  budget surplus : an excess of government receipts over  government spending. 4.
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This note was uploaded on 08/31/2009 for the course EC 350 taught by Professor Sekelj during the Spring '08 term at Clarkson University .

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Ch 12 outline - Chapter 12 outline: I. A Financial Overview...

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