Studied by 0 people
Looks like no one added any tags here yet for you.
Government’s fiscal year
october 1st- september 30th
mandatory spending
doesn’t need annual approval
discretionary spending
needs annual approval
Appropriations bill
a law that approves spending for a specific activity
what are steps of an appropriations bill?
begins at h.o.r, the senate works with them to pass all bills by the beginning of the fy. they must be approved by both houses and then move on to be signed or vetoed by the president
two main parts of the federal budget
revenues and expenditures
top two sources of federal revenue
social security and medicare
Social security
provides money for people who are retired or disabled
Medicare
pays a portion of healthcare costs for elderly people
additional 4 sources of federal revenue
excise tax, estate taxes, taxes on certain gifts, and misc. sources like entry fees
proportional taxes
take some % of income from everyone regardless of how much they earn
progressive taxes
income increases, taxes increase (ex. federal income tax)
regressive taxes
income increases, tax rate decreases (ex. gas tank)
single largest expenditure category in federal budget
social security
second highest expenditure category in federal budget
national defense
intergovernmental revenues
money that one level of government receives from another level; most important sources of state government revenues
next 3 largest sources of state revenue
sales tax, contributions, and income taxes
second largest source of revenue for local governments
property taxes
special assessment
a fee property owners must pay for local services
largest expenditure for the state
intergovernmental expenditure
3 types of entitlement programs state governments provide
health, nutritional, or income payments
why do states subsidize colleges and universities
don’t have higher tuitions or fees
4 services local governments must pay for
education, police and fire protection, water supply, and sewage and sanitation
federal government budget status
deficit
how does the federal government borrow money
selling bonds
Bond
contract to repay the money borrowed with interest at a specific time in the future
balanced budget
spending = revenue; federal government doesn’t have to borrow to pay expenses
why do state and local governments try to maintain an emergency fund balance?
to prevent the need to borrow money
why does the government sometimes spend large sums even when the economy is strong?
to maintain government services people want
How do politics affect fiscal policy
lawmakers opposing increased spending or tax cuts based on personal beliefs
two automatic stabilizers in the US economy
unemployment benefits (payments for job loss from insurance) and income tax (when unemployed→lower tax brackets, putting ease on the impact of loss of income)
Demand
leans democratic
Supply
leans republican
Deficit spending
spending more than we take in in a year
Federal debt
total amount borrowed from investors to finance deficit spending by the government (over time)
public debt
money government owes itself
private debt
government borrows from the people (through bonds)
NC revenue comes from
sales and use tax and individual income tax
state tax revenue goes toward
k-12 ed., health and human sevices, higher ed., and justice and public safety
