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TERMS
DEFINTION
*Continuing
Resolution
a joint resolution, passed by Congress and
signed by the president, that allows the
government to operate at current funding
levels for a fixed period; required when
Congress and the president cannot reach
agreement on a new budget
*Corporate
Income Tax
a tax paid by businesses on their profits each
year
Earmarks
specific spending proposals that members of
Congress attach to legislation, usually to benefit
their home districts or states
*Entitlements
benefits that must be provided to all eligible
people who seek them; examples include Social
Security and Medicare
Federal
Deficit
the amount by which the national
government’s annual expenditures exceed its
revenues
TERMS
DEFINITION
*Fiscal
Year
the 12-month accounting period an
organization uses for budgeting, record
keeping, and financial reporting
Impoundment
the refusal by a chief executive to
spend funds that have been
appropriated by the legislature
*Mandatory
Spending
*National
Debt
government expenditures required by
law to be allocated in specified ways
Tax
Freedom
Day
the date, calculated each year, when
the country has earned enough income
to pay its annual tax burden; rising
budgets have pushed this date back
over time
the amount of money a country owes
to lenders
QUESTIONS
ANSWERS
1. What is the
BALANCED=
difference between
REVENUES=EXPENDITURES
having a “BALANCED
SURPLUS=
BUDGET” and a
REVENUES >EXPENDITURES
“BUDGET SURPLUS?”
2. When is the only
time that the US
experienced a federal
deficit?
NIXON=
3. Which president
He refused to spend
used the power of
billions of appropriated
“IMPOUNDMENT”
dollars on federal programs
and why?
that he did not approve of
WAR!
PHASES
DESCRIPTION
1. Executive Branch
Prepares Budget
Proposal
2. Congress
Drafts a
Budget Resolution
3. Congress Enacts
Appropriations
Reflects the vision of the
President and their
administration and the
needs of the country
4. New Fiscal Year
Begins…
OR DOES IT???
House and Senate Budget
committees edit it
prioritizing spending or
cuts
Congress works on the 13
appropriation categories of
the budget and awaits
presidential approval
President+Congress Agree=
Budget
If they do not agree=
Continuing Resolution 
Budget Crisis
TAX
WHO/WHAT?
WHY?
% OF REVENUE
INDIVIDUAL
INCOME
(PROGRESSIVE)
a tax levied on the annual
income of an individual or a
married couple
Individual citizens need to
provide support to public
goods and services
39%
SOCIAL
INSURANCE
(REGRESSIVE)
a tax used to fund government
assistance to the elderly and to
unemployed or disabled workers
They need support and
cannot provide for
themselves
32%
CORPORATE
INCOME
(PROGRESSIVE)
a tax paid by businesses on their
profits each year
Profits gained by businesses
are thanks in part to the US
13%
EXCISE
(REGRESSIVE)
a tax levied on the sale of certain
goods and services
“Sin” taxes on alcohol,
tobacco, firearms, etc.
3%
PROGRESSIVE
any tax in which the burden falls
more heavily on the rich than the
poor
Wealthier individuals can
take on a greater tax burden
NA
REGRESSIVE
any tax in which the burden falls
more heavily on the poor than
Proportional tax rates that
taxes everyone equal
NA
CATEGORY
DESCRIPTION
•Spending that the
government HAS to spend
MANDATORY
SPENDING
•52% of Mandatory
Spending is on
entitlements (Social
Security, Medicare, etc.)
•About 65% of tax revenue
is spent mandatorily
DISCRETIONARY
SPENDING
•Spending that can be
DETERMINED
•52% of Discretionary
Spending is on Defense
TAX
WHAT IS IT?
PROS
CONS
SALES
Sale on general goods
Easy to collect
Regressive
Hard to hide
PROPERTY
Homes, property, land,
etc.=primary source of
income for local gov.
Tax may not reflect owner’s
ability to pay
INDIVIDUAL
INCOME
State residents (43 states)
Progressive Tax (1% on lower
incomes to 10% on higher
incomes)
People may move to states
that do not have it
EXCISE
“Sin” tax
Easy for politicians to justify
May encourage illegal
trafficking
LOTTERY
Legal gambling
Provides money for public
services
Regressive and geared
towards low income
BONDS
Debts issued by gov. for
specific cause
Helps fund large projects
with citizen support
Debt can be a heavy burden
on future taxpayers
INHERITANCE
AND ESTATE
Those who inherit estates
Progressive
May discourage savings
USER
FEES
Use of public goods,
services, or facilities
Those who want public
services support them
through paying
Low income may not be able
to afford services