Cornell Notes:

• Unit: The Presidency

• Topic: The Federal Budget Process

• Guiding Question: How does the government manage money to conduct affairs?

Budget Basics• 18 Months before the fiscal year the federal

agencies propose individual budget needs to President’s Office of Budget and Management

• The President then sends the budget to Congressional Budget Committees

• The Congressional Budget Office analyzes the numbers in the budget. The CBO is non-partisan budget analysis group in the Congress.

• The Congress votes on the budget.

Types of Taxes• Income Taxes—People are taxed on the basis of

how much they make. This is called a progressive tax system. (A flat tax is an example of a regressive tax system.)

• Payroll Tax—Taxes deducted from the payroll for federal entitlement programs such as Medicare, social security, and unemployment insurance.

• Corporate Income Taxes—Taxes on corporate Profits

• Excise Taxes—Taxes on specific manufactured products. (Sin taxes are examples of excise taxes—taxes on cigarettes, alcohol, gambling, etc…)

2010 Federal Tax Rate

Tax Rate

Married Couples Filing Jointly

Most Single Filers

10% Not over $16,750 Not over $8,375

15% $16,750 – $68,000 $8,375 – $34,000

25% $68,000 – $137,300 $34,000 – $82,400

28% $137,300 – $209,250 $82,400 – $171,850

33% $209,250 – $373,650 $171,850 – $373,650

35% Over $373,650 Over $373,650

Progressive Tax: People who have a higher income pay a higher taxRegressive Tax: People pay the same tax rate regardless of incomeDisposable Income: Money that is not used for basic necessities such as food, shelter, or medical expenses.

Journal Topic: Fair Taxes

• Some people argue that we should have a flat tax which means we would tax everyone the same. What is your opinion of this?

Debt vs. Deficit

• The debt is the total amount of money the federal government owes to banks or individuals.

• The government borrows money by selling bonds.

• The deficit is the negative difference between the total revenue in taxes and expenditures for a fiscal year.

Federal Expenditures

• Top three areas of expenditure are Medicare, social security, and national defense.

Journal Topic: Scary Federal Debt Facts

•http://www.cbsnews.com/8301-505144_162-57376464/12-scary-debt-facts-for-2012/

•Task: Go to this website, read the article and write a reflection regarding your thoughts, concerns, questions, in a journal response.