Taxes and Economic Policy - Eli Elliott by Eli Elliott

Proportional Tax

elliotteli — 2023-11-15 17:06:19 UTC

Proportional Tax is a tax that takes the same percentage of money from every single American tax payer, it's also known as a flat tax.

Progressive Tax

elliotteli — 2023-11-15 17:11:25 UTC

Progressive Tax is a tax where the higher income you make the higher the taxes increase. The more you make the more you pay.

Regressive Tax

elliotteli — 2023-11-15 17:15:14 UTC

Regressive Tax is a tax that takes a larger percentage of income from low-income families.

Example - Sales Tax and Property Tax.

Federal Revenue

elliotteli — 2023-11-27 17:05:45 UTC

income received from taxes and other sources to pay for government expenditures.

The total revenue of the government in 2023 is $4.44 trillion
The largest category of income for the U.S. government is income tax.

Federal Expenditures

elliotteli — 2023-11-27 17:06:07 UTC

The money that the government spends.

We spent 6.4 trillion.
The largest area of spending for the government is defense.
Mandatory spending is spending that is mandated by laws. Discretionary spending is spending that isn't necessary for the government to function.
Education is the largest non defense related expenditure that the U.S. has.

State Revenues

elliotteli — 2023-11-27 17:06:30 UTC

Money that states receive through various things.

Taxes is where states get most of their money from.
general tax accounted for 29.5% of the 2022 state revenue.

State Spending

elliotteli — 2023-11-27 17:06:46 UTC

The money that a state spends.

The top 3 largest spending areas in a states budget is Health care, Education, and Higher Education.
States spend 25.2% of their budget on k-12 education.

Local Revenues

elliotteli — 2023-11-27 17:06:57 UTC

They get most of their money from taxes.

Property tax
Income tax
General sales tax
Allendale earned $62,000,000 in taxes in 2021
property tax is exclusive to local revenues.

Local Spending

elliotteli — 2023-11-27 17:07:08 UTC

Local governments spend the most money on Public welfare, Education, and Health/Hospitals.

Comparison

elliotteli — 2023-11-27 17:07:21 UTC

State governments earn most of their money through income taxes and local governments get most of their money through property taxes.

They both spend most of their money on health and education.

Benefit Principle and Definition

elliotteli — 2023-11-27 17:08:32 UTC

The more you use a public service, the more you pay in taxes related to that service.

Ability To Pay Principle and Definition

elliotteli — 2023-11-27 17:09:02 UTC

The more you make the more you pay in taxes.

Definition

elliotteli — 2023-11-29 02:47:02 UTC

Fiscal policy is when the government use's taxation and public spending in order to control the total demand for goods or control the size of the economy.

Budget Process

elliotteli — 2023-11-29 02:49:07 UTC

Expansionary Policy

elliotteli — 2023-11-29 02:49:22 UTC

a set of economic measures taken by a government or bank to make the economy grow.

Example: cutting taxes or increasing spending will expand the economy.

Contractionary Policy

elliotteli — 2023-11-29 02:49:37 UTC

A set of economic policies taken by the government or a bank to make the economy shrink.

Examples: raising taxes or decreasing spending will shrink the economy.

Issues With Fiscal Policy

elliotteli — 2023-11-29 02:49:56 UTC

The government moves slow so it will take a long time to make changes in order to grow or shrink the economy. It can also raise/shrink Inflation and unemployment.

Definition

elliotteli — 2023-11-29 03:10:32 UTC

Actions that the FED uses to control the supply of money in an economy.

Open Market Operations

elliotteli — 2023-11-29 03:12:26 UTC

The FED will buy or sell bonds/securities to either grow or shrink the economy.

Changes in the Discount Rate

elliotteli — 2023-11-29 03:12:45 UTC

The Discount Rate is the interest that the FED charges banks for short term loans.

lowering the Discount Rate will speed up or grow the economy.

Increasing the Discount Rate will slow down or shrink the economy.

Changes in the Reserve Requirement

elliotteli — 2023-11-29 03:13:13 UTC

The Reserve Requirement is the amount of money deposited that a bank needs to keep on hand in case of a sudden withdrawal.

If the Reserve Requirement increases then the economy will shrink.

If the Reserve Requirement decreases then the economy will grow.

IORB and the Federal Fund Rate

elliotteli — 2023-11-29 03:13:57 UTC

IORB = Interest On Reserve Balances.

Federal Funds Rate = The federal funds rate is the interest rate that banks charge each other to borrow or lend excess reserves

Issues with Monetary Policy

elliotteli — 2023-11-29 03:14:35 UTC

When adding more money to the economy there's a chance that it could cause massive inflation.

It takes time to work.