EPF Unit 5 Test Review

what taxes pay for

government goods and services

services provided by the gov through taxes

national defense, police and fire, public schools, public parks

criteria required for something to be a public good or service

nonexcludable (citizens can’t be prevented from using), nonrivalrous (can be used by many or all citizens at the same time)

example of public assistance program

Supplemental Nutrition Assistance Program (SANP), provides money in form of debit card for poor people to buy food

purpose of public assistance programs

help keep society stable

deregulation

stopping or decreasing government regulation of an economic activity

possible positives of deregulation

creates competition, lowers prices

possible negatives of deregulation

less workplace safety, manufacturing practices damage the environment, unfair labor policies

social security

provide income to individuals who have reached the age of legal requirement or are unable to work

FICA taxes

taxes taken out of you check for social security and medicare (6.2% for SS, 1.45% for medicare, paid by employee and employer)

excise taxes

taxes on specific products to pay for the cost of a product or to discourage use of the product (ex. airline ticket, cigarettes, alcohol)

estate taxes

taxes placed on the value of a person’s property after they die, tax on wealth

corporate taxes

taxes placed on business profits

capital gains tax

tax paid when an investment such as stocks are sold for a profit

progressive tax

tax paid at a different rate depending on income level (more money means higher taxes)

gas tax

pays for road and bridge construction/repair, 18.3 cents per gallon of gasoline, 24.3 cents per gallon of diesel

income tax

tax paid on wages and any other sources of income, 4.99%

flat tax

tax paid in the same proportion regardless of income

sales tax

tax paid at certain percentage of the price of the product being purchased (state is 4.75%, county is 2-2.75%)

only local tax in NC

property tax (tax on value of property, supports local gov)

fees we pay

registering a business, filing a civil lawsuit, renewing car registration, camp in state park, college fees (tuition, book, meal plan, room and board)

surplus

gov that raises more in funds in taxes than it spends

deficit

gov that spends more than it takes in through taxes

spending controlled by congress and percent of federal budget

discretionary spending, 35%

mandatory spending items

social security and medicare, interest on federal debt, entitlement programs

reason for mandatory spending increase to more than 60%

aging US population and growing national debt

economic development

grants, loans, and reimbursements for businesses that create jobs

infrastructure development

repairing and rebuilding roads, airports, bridges, public transportation, rail lines, and facilities needed by businesses in order to encourage development

education

provide money for different educational programs

general welfare/quality of life cooperative extension service

partnership between NCSU, NC A&T, and community agencies to help NC with nutrition, health, gardening, conservation and environmental issues, and to help farmers through research and technology

government operation board of election

each county has one that is responsible for carrying out the election process efficiently

emergency management agencies

agencies concerned with public safety and those concerned with natural disasters

jails, prisons, youth detention centers

Jails, those accused of a crime and awaiting trial or convicted of a misdemeanor.  Prison, those convicted of felonies.  Detention centers are where convicted juveniles are housed

tax assessment

assess the value of property within a given county for the purpose of properly levying taxes

social services

provide services such as placement for abused children, investigating alleged child abuse, helping underprivileged families, assisting with mental illness, helping families faced with crisis

opposing viewpoint on the state lottery

raises money for education without raising taxes, entices the poor to spend money they need to live in hopes of getting rich

W-4 forms

withholding certificate to estimate how much of their paycheck should be deducted for taxes so that none are owed at the end of the year

exemptions

situation that keep people or organizations form paying taxes on some or all of their income

dependent

child or relative who relies on a taxpayer for support

deductions

expenses taxpayers can claim and take off their income when they file their taxes to reduce their taxable income

head of household

an unmarried person with dependents

premiums

payments people make for insurance

health insurance

helps to cover medical care

affordable care act

federal program that provides assistance in finding health insurance

medicare

government run health insurance program for seniors and disabled

medicaid

government run health insurance program for lower income people

retirement accounts

long-term investments designed to pay money to people when they are older and no longer work at a job

pensions

retirement accounts established for workers but heir employers

401(k)

retirement plan offered by employers where money is automatically taken out of your paycheck and often the amount is matched by the employer, only taxed when money is taken out

403(b)

plan that covers public schools and nonprofits, annuity that pays a fixed amount per month, contributions are sheltered

individual retirement account (IRA)

retirement program that can be offered by employers or an employee can invest in on their own

traditional IRA

contributions are a tax deduction, when money is withdrawn it is then taxed, must start taking money out at age 72

Roth IRA

contributions are taxed when taken out of your paycheck,  you do not pay taxes on any money withdrawn after age 59.5

flexible savings accounts for healthcare

money used to pay for medical expenses not covered by health insurance

529 plan

savings for college

union dues

pays for membership in a union

involunt