Social Studies - 2019-20

CE.13c - Taxes in Local, State, and Federal Governments

The student will apply social science skills to understand the role of government in the United States economy by

c) describing how local, state, and federal governments allocate their budgets and collect taxes to pay for goods and services they provide;


Adopted: 2015

BIG IDEAS

UNDERSTANDING THE STANDARD

Every level of government—

federal, state, and local—requires revenue to pay for goods and services provided by the government. Taxes and fees levied on individuals and businesses are the major source of this revenue.

Local, state, and federal governments determine how best to use and allocate the money they collect.


ESSENTIALS

In the United States, governments collect several different types of revenue or taxes from individuals and businesses:

 The income tax is a main source of revenue for the federal government.

 Income taxes and sales tax are key sources of revenue for state governments.

 Property and sales taxes are key sources of revenue for most local governments.

Income tax: Payments made by individuals and corporations based on income received.

Sales tax: A tax consumers pay on many items they purchase. It is a percentage of the sale price.

Property tax: A tax levied on land and buildings. Property tax may also be levied on personal property, such as boats or cars.

Federal government revenue pays for services such as national defense and homeland security, some medical expenditures such as Medicare, payments to Social Security recipients, and interest payments on the national debt.

Most state and local government revenue is spent on education, public health and welfare, road construction and repair, and public safety, including police and fire departments.


KEY VOCABULARY

Updated: May 16, 2018