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How the Government Raises Money

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Audrey Roberts

on 23 September 2014

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Transcript of How the Government Raises Money

Taxes are the primary source of the government's revenue

In 2010, the government collected $2.2 trillion in taxes. This is about 15% of the total GDP for America.
How the Government Raises Money
Definition: Government income
The government
Government borrows money to raise its funds. When the government wants to construct a new building it often gets the money it needs through borrowing. The government borrows this money by selling bonds. By doing so, the government owes a debt and must pay interest on their debt. The legislative branch decides what to use the borrowed money for.

This is the primary reason that the government is in debt
Income Taxes
Based on income
Anyone who makes an income pays these taxes
Most of the government's revenue
Income tax filings are due on April 15, annually
Each year, the income tax brackets are adjusted for inflation
Progressive taxes, as your income increases, your tax rates increase
Property Taxes
Payroll Taxes
Giving money to the government
so later they will pay it back with
Sales Taxes
a.k.a. Consumptive Taxes
Corporate Taxes
Increases the amount of money you pay for things
Local - changes depending on where you are
Government charges produces a certain percentage of their profit
stores charge that percentage as sales tax
If a package of mints in $1 and sales tax is 7%, you would actually pay $1.07 for the mints and the store would give $.07 to the state
1.276 trillion in bonds to China
Capital Gains Taxes
Inheritance/Estate Taxes
699 million in bonds to UK
1.108 trillion in bonds to Japan
Taxes that are taken out of employees' wages, or paid by the employer based on employee income.
These taxes are generally put towards Medicare or other welfare programs.

"Borrowing and the Federal Debt." National Priorities Project. N.p., n.d. Web. 12 Sept. 2014. <https://www.nationalpriorities.org/budget-basics/federal-budget-101/borrowing-and-federal-debt/>.

"Capital Gains Tax Definition | Investopedia." Investopedia. N.p., n.d. Web. 16 Sept. 2014.
Dlabay, Les R., Steven A. Eggland, and Jim Burrow. Intro to business. 6th ed. Mason, OH: Thomson/South-Western, 2006. Print.

"Federal Revenue: Where Does the Money Come From." National Priorities Project. N.p., n.d. Web. 12 Sept. 2014. <https://www.nationalpriorities.org/budget-basics/federal-budget-101/revenues/>.

"Overview of the 7 Different Types of Taxes & Who Pays Them." Bright Hub. N.p., n.d. Web. 12 Sept. 2014. <http://www.brighthub.com/money/personal-finance/articles/32816.aspx>.

"Payroll Taxes Social Security Medicare Employers." About. N.p., n.d. Web. 12 Sept. 2014. <http://biztaxlaw.about.com/od/glossaryp/a/payrolltaxes.htm>.

"Taxes, Tariffs and Fees: How Government Raises Money." Center Forward. N.p., n.d. Web. 12 Sept. 2014.

Williams, Roberton. "The Numbers: What Are the Federal Government's Sources of Revenue?" Tax Polify Center. N.p., 3 Sept. 2011. Web. 12 Sept. 2014

Income taxes on business income.
All businesses pay these taxes
Usually requires a professional to fill out the complicated paperwork and file the taxes

The government owes:
1.276 trillion in bonds to China

Based on value of land and buildings.
Schools and other public services/utilities provided by the government (such as public restrooms and transportation) are paid for by property taxes.


The government gets the money to pay back their bonds from taxes collected from the people.

Estate Taxes: you pay the government when you die for what you left behind.
Inheritance Taxes: Taxes paid from individuals from inheriting money
Taxes on investments that have created a profit for the investor.
Examples would be stocks, bonds, real estate, etc.
Most of the filing for these taxes are done by professionals.





Taxes Paid by the Individual
Business Paid Taxes
Taxes Paid by Businesses
What is a bond?
What day are income taxes due?
Which nation does the government owe the most money to in bonds?
a. England
b. Asia
c. China
d. Japan
e. New York
What is the other name for a
consumptive tax?
Should the percentage of income tax you pay be determined by how much money you make? (opinion-based)
Full transcript