Fiscal Policy

After the president submits the federal budget to the House and Senate, congressional committees revise the draft.

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Fiscal policy is the series of decisions a government makes about taxation and spending.

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The federal budget lists the nation's expenditures and revenue sources.

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The nation's fiscal policy is recorded in the federal budget.

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The president proposes a budget. -> Committees revise the budget. -> Congress approves the budget. -> The president signs the budget into law.

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Tariffs

-Are levied on imports -Are taxes applied to foreign goods -Protect US-made goods

Excise taxes

-Can discourage product use -Can be applied to gambling -Is added to gas purchase

All workers are responsible for paying payroll taxes.

-Deductions are taken from employee's paycheck. -Payments are made for social security, medicare, and unemployment insurance.

Income tax

-Tax meant to discourage the purchase of a product

Tariff

-Tax paid annually on earnings each April

Payroll tax

-Tax paid by a company to sell goods from Spain in the United States

Citizens must pay income tax every year.

-The tax is based on earnings from salary and investments. -Taxpayers must report earnings to the government by April of each year.

Governments must decide how to tax:

-business incomes -citizens' incomes -trade

The federal and state governments impose excise taxes on:

-gasoline -gambling -cigarettes -alcohol

Businesses pay corporate taxes:

-on their earnings. -over the course of a year

When making spending decisions, the government must decide how to:

-pay for public service. -support national defense. -cover the cost of entitlement programs, including Social Security and Medicare. -promote invasion.

The federal government imposes tariffs to:

-protect domestic goods -increase government revenue

Excise tax

a tax on goods made within one's own country

Revenue

are money obtained through taxes and borrowing.

Expenditure

are money spent on government programs.

A tariff

is a tax issued by the federal government on imported goods.

Fiscal policy

the government's approach to taxation and spending