Government & Taxation test, yo!

Part I. Final Manifesto
I feel about the same that I did at the start of the unit. The difference is, now I've got better ideas about how all of what I believe could be done. I think that the government should have a large part in our economy because they are what runs us and keeps us going. It is important for them to have the powers to keep us safe. This would include being able to step in when the markets are heading downhill and protecting us. I believe they should at least bail out and assist large corporations that are going to have a substantial effect on the country.
Situations such as what money is spent on and how much should have influence from the people. The government should be able to help us out, but they will not tell us what is good for us. The american people will still have the right to influence what happens with all of the money within the government. As for the debt crisis, it is as much the government's fault as it is the people's fault. Change can't just come from the government, the people must assist in this change.

Part II. The Federal Budget
The federal budget is most definitely an interesting thing. Looking at revenues versus expenditures in 2011, we can see that there is a different of 1,295 billion dollars. That means that we either A. borrowed that amount or B. Used up money we had saved. Most likely, it is mostly money we borrowed. This is concerning for me because it means we'll just be sinking into even more and more debt than we already are in.
In terms of where we get our money, a very large amount (47%) is gained from personal income. The second biggest is the Social Security and Social Insurance funds, at 36%. These two things alone provided 83% of the total revenue of the government in 2011. I think that we shouldn't rely on these two things alone to such a large extent. We should be able to use the other areas to make money as well
The spending chart is more even than the revenue chart, which I think is good. !8% is discretionary spending, while the remaining 82% is mandatory spending. I think it's good that the highest amount of mandatory spending is on medicare and medicaid. It is important for the government to take care of us. Without healthy citizens, the country would no be able to run properly. I think that the defense department doesn't need to be as big as it is. It could be a little smaller.
Of the 18% discretionary spending in this budget, a lot of it is "Human and Health Services", which I think is, once again, a very good idea. The citizens of the United States deserve to have great healthcare. Education is the third largest discretionary expenditure, but I think that it could and should be larger than it is now. Education, like health, is an integral part of our society.

Part III. Personal Taxation
I believe that the progressive tax, similar to what we currently have, is the best system. A progressive tax system is the best system for taxation in the United States because it is flexible and it takes care of everyone in a way that is proportional to their income.
I believe that this is important in a tax because it accounts for the amounts people can pay. Someone making very little money can't pay a very large percent, whereas someone making a lot could easily pay a larger percent and not miss it as much as the one with little money.
The tax is also flexible in that it can be interpreted in many different ways and can easily be changed or added to in order to get what we need from it. The flexibility stands in contrast to flat taxes, and other regressive taxes.
Overall, this tax is the most agreeable tax among all of them. And hey, we currently have it and it's not working too badly. With its flexibility and its ability to take into account a person's income, a progressive tax is the best choice.

Part IV. The National Debt Crisis
The National Debt Crisis is alarming. It is insane how much money is spent within the government. What amazes me further is how much of that money we've borrowed from others. I really wish I could come up with a solution for the debt crisis, but something this big cannot have a simple solution. I guess that my best suggestion and guess would be to attempt to cut spending as much as possible. That whole american people would need to help. We would have to get used to spending less and consuming less. This would be difficult, as it is ingrained in our society to spend and consume, but I think we may be able to do it.
Anyways, such a large amount of money that we owe to other countries is startling. My solution goes with my final manifesto because I believe the government should be able to help themselves a little. They've dug themselves into this hole, why can't they dig themselves out? Anyways, with our help as a people we should be able to fix this over some years.

Part V. Extra Credit
10.2:

• Two-thirds of federal spending is mandatory (law says they must pay this), one third is discretionary spending (get to choose what it's spent on)
• The fiscal year (financial planning period) of the government is October 1st to September 30th
• Step 1: President establishes general budget guidelines
• Step 2: House debates discretionary spending recommended by the president
• Step 3: Reviews and approves bills from house, may draft their own versions
• Step 4: Everything that has been decided on by congress is sent back to the President for final apporval
• One half of federal expenditures are on social security, national defense, and income security
• Other items include: medicare, health, net interest on debt, education/training/employment & social services, transportation, veterans' benefits, administration of justice, natural resources/the environment, and others
• Every different category contains tons of smaller things it is spent on
• So, overall, this chapter tells about how the government decides on the budget and tells about the biggest things they decide on

10.4:

• Deficit spending is when the government spends more than it has collected
• This spending can sometimes be planned, other times it is unplanned but necessary
• Running a deficit adds to the federal debt
• A balanced budget means that the government spend as much as it made, no gains or losses
• The national debt has been growing since 1900
• The government does not plan when it will pay off the debt, it just keeps adding to it
• The debt impacts the economy greatly
• Attempts at taming the deficit include: Gramm-Rudman-Hollings, Budget Enforcement Act of 1990, Omnibus Budget Reconciliation Act of 1993, Balanced Budget Agreement of 1997
• In 1998 the federal government ran its first surplus; they made more money than they spent

Tax Analogies

Progressive taxes are like stairs, the higher you get the more the tax increases.

A flat tax is like a moving walkway at an airport, everybody is taxed at the same rate.

A national sales tax can be represented by coins because every time you buy something you have to pay a few extra cents; you're getting nickle and dimed.

Value added tax is like someone hiding in the bushes because the tax is hidden within the product to some extent.

Progressive Tax

I definitely support the progressive tax theory. I don't think it matters how many of us are paying income taxes because we've set up this system of progressive taxation and it has a bunch of built in tax breaks that are a part of the system. I think it works well and I'm in support of this system. In addition, most of the people who do not pay any taxes are people who couldn't afford to pay taxes anyways. I think it is important for people who make less money to not pay taxes. At least not a lot of taxes. So overall I like progressive taxation and agree with it.