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Proportional taxes take the same percentage out of everyone account that pay for their taxes.

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When the income increases the percentage of income paid out as taxes increase.

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Regressive taxes take a large share in taxes from low income households.

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Benefit principle in theory that taxes from the public finance.

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The Ability-to-Pay principle is the amount of tax an individual or organization pays relating to the amount they earn.

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What is the dollar value of all government revenue to date in 2023?

$4.44 trillion

What is the largest category of income for the Federal Government?

Individual income taxes

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What is the amount that the government has spent to date in 2023?

$6.13 trillion

What are the largest areas of spending for the federal government?

25 % Social Security.

19 % National Defense.

16 % Net Interest.

What is the difference between Mandatory and Discretionary Spending?

mandatory spending is ongoing; it occurs each year absent a change in an underlying law that provides the funding.

What is the largest area of non-defense spending for the Federal Government?

Transportation and education programs account for the largest shares of nondefense discretionary outlays.

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Where does the State receive most of its funding?

Federal Grants.

What percentage of the State Revenue for 2022 is from General Tax sources?

46%

What Sources of Revenue exist that are exclusive to the State level of government, compared to local governments?

Income, Sales, Property taxes

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What areas of spending were the largest in the state budget? Provide the top 3 Categories.

Education, Health care, Human Services

What percentage of money was spent on education?

6%

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Where does the Locality receive most of its funding? Provide the three largest categories

State grants, General taxes, Health care

How much did Allendale earn in 2021 through Taxes?

23,696 to 23,999, a 1.28% increase

What Sources of Revenue exist that are exclusive to the Local level of government, compared to State governments?

Intergovernmental revenue, Property taxes, Utility revenues, and Sales tax are all exclusive to local compared to state government.

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What areas of spending were the largest in the Local budget? Provide the top 3 Categories.

Social security, Health care, Income Security

How much money was received by Allendale from the State Government?

$321 Million Investment

What would likely be counted in the “Recreation and Culture” section of the local budget?

Revenue, Discretionary spending, and Direct spending

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What similarities and differences are there between State and Local Sources of Revenue?

Income and sales taxes make up the combination of state tax revenue, and then property tax is the largest source of tax revenue for local government with the school district included.

What similarities and differences are there between State and Local Spending?

The Local government expenditure is focused less on public welfare and more on education with elementary and secondary education, housing, public safety, and utilities.

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Definition and Image (How will you remember fiscal policy?)

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Definition and Image (How will you remember fiscal policy?)

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The government uses different fiscal policies for the collection of revenue.

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What are the key steps to the U.S. Budget Process? Provide 5 key steps, beginning and ending with the President.

1. The President submits a Budget

2. The House and Senate pass budget resolutions.

3. House and Senate create proportional bills

4. The House and Senate vote on the bills' appropriation.

5. The President signs each appropriation bill and the budget is now into law.

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Definition and Examples

Expansionary Policy is a way to make the economy bigger, then decreasing the unemployment rate and increasing the inflation rate.

Examples of expansionary policy:

cut taxes and increase spending.

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Definition and Examples

Contraction Policy is a way to slow the economy and increases the unemployment rate and decrease inflation

Example of Contractionary policy:

Raise taxes and cut spending

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Explain some of the issues/problems with Fiscal Policy

Fiscal policy can be changed by politics and voters, which can lead to poor decisions with a lack of support from economic data or theory. If monetary policy is not coordinated with a fiscal policy carried out by governments, it can undermine their efforts.

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 Definition and Image (How will you remember Monetary Policy)

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 Definition and Image (How will you remember Monetary Policy)

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Monetary policy is when there is control of the interest rate payable for short-term borrowing or the money supply. It is adopted by the monetary authority of a nation

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The Fed has the option to buy or sell bonds to banks. The size of the economy as well as how much money is in circulation will increase, as an example, if the Fed gains bonds and transfers money to the bank. If the Federal Government decides to buy bonds, it will have to borrow money from the banks, which will result in the amount of money in circulation reducing as well as the size of the economy.

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As a result of the Fed raising the discount rate, the economy will slow down while it will grow faster if they lower it. For example, the Fed can lower discount rates to make it simpler for banks to borrow money, leading to a rise in the size of the economy.

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If the Fed is attempting to contract, they will raise the reserve requirement while if they are trying to expand, they will lower the reserve requirement. For example, if the economy is expanding but with high inflation, the Fed can raise the reserve requirement in order to decrease the size of the economy and lower the rate of inflation.

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FFR is used to limit the amount of money that is available and to combat inflation as well as other interest rates.

The IORB impacts banks as banks use the Fed to deposit their funds and earn the IROB rate as a reservation rate.

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Excessive borrowing

Risk of inflation