Although the Internet has led to greater civic participation it also raises

Although the internet has led to greater civic

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Although the Internet has led to greater civic participation, it also raises legal issues about obscene content posted online. Congress has struggled with how to protect children from online pornography while at the same time upholding constitutional protections of free speech. Another challenge is whether to tax e- commerce. A group of states supports a plan to use the same tax rate for all e-commerce sales, but online retailers, technology companies, and Congress have resisted any such plan. Student: The government can communicate with the most people using the Internet. Chapter 20: Taxing and Spending Essential Question How does the government spend the taxes you pay, and how do government expenditures affect the economy? Section 1 Raising Money Two major sources of government revenue are taxes and borrowing. The individual income tax is the federal government's biggest single source of revenue. Employers withhold a certain amount of money from workers' wages and send this money to the Internal Revenue Service throughout the year. Corporations must also pay income taxes. Nonprofit organizations are exempt. The federal government also collects huge sums of social insurance taxes to pay for Social Security, Medicare, and unemployment compensation programs. Other forms of taxes include excise taxes on the manufacture, transportation, sale, or consumption of certain goods and services; customs duties; and estate and gift taxes. Governments use taxes to influence the economy and economic behavior. Tax deductions for mortgage interest encourage people to buy homes, for example. Tax exemptions free certain groups and industries from particular taxpaying obligations. The Tax Reform Act of 1986 overhauled the tax system. In addition to collecting taxes, the federal government borrows money by selling federal securities—bonds, notes, and treasury bills. Small investors purchase savings bonds. The government pays a huge amount of interest on these borrowed funds. When the government spends more than its income, it runs a deficit. All the deficits over time create the national debt. Section 2 Preparing the Federal Budget The federal budget expresses important political choices by the president's administration. The law requires the president to propose to Congress the budget for the entire federal government each fiscal year. The actual preparation of the budget is the responsibility of the Office of Management and Budget (OMB). Each federal agency draws up a list of its own spending plans and sends these to the OMB. The president and his advisers study this preliminary budget and send the spending requests back to the agencies for fine-tuning. After a final presidential review, the budget is sent to Congress. Certain items in the budget cannot be changed, such as entitlements and the interest that must be paid on the national debt.
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  • Fall '13
  • Bernstein
  • Government, United States Congress, U.S. Congress

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