The Federal Budget Analysis

1010 Words3 Pages
bulb-icon

Recommended: Income and wealth inequality sociology

Many people believe that the government has an obligation to take care of its citizens and provide them with the various goods, programs, services, opportunities, and safety for an enjoyable life. Although some may disagree, we should consider ourselves fortunate to have many of those privileges granted to us by our government. However, by now, you should know that nothing in this world is free; the US government has to spend billions and billions of dollars annually on programs for its citizens. Every year the government sets the amount of money it’s going to spend on these programs, called the federal budget. For the Fiscal Year 2015, the federal budget is $3.7 trillion dollars. Yet, the US government only about has $3.2 trillion dollars …show more content…

However, there is an indirect form of spending that also affects the US deficits in a negative way. Tax breaks are basically tax reductions for citizens written into the federal tax code to promote certain activities that they believe are beneficial to the public good of society in order to boost the economy. For example, they may give special low rates on capital gains or a deduction for mortgage interest rates. These tax breaks means that the government chooses to receive less tax revenue which means less money in the US Treasury, and are expected to cost the federal government $1.22 trillion in 2015. That’s more than all discretionary spending in the same …show more content…

One interesting characteristic of the federal revenue is that large corporations actually contribute less money to the budget than individuals. Reason being, that the wages and salaries of all Americans accumulated is much larger than profits of US corporations. Another reason for this is that many corporations exploit loopholes in the tax code to avoid liability. Most corporations should pay a 35% tax rate, yet many corporations pay a much lower percent of their profit in taxes. One common example of a loophole is when multinational corporations divide their profits to their overseas operations. This has led to much controversy in the US because many people believe that these companies that exploit these loopholes have an obligation to taxes to the US, especially during difficult economic times where the nation really needs the

Show More
Related

  • Federal Budget Dbq

    1355 Words  | 3 Pages

    Our Preamble lists five main goals that are required to help create a strong and stable society within our country. However, money is required in order to achieve these goals. We get this money from the Federal Budget which is the yearly amount we receive in order to better our country. The question here is, are we slicing the pie correctly in relation to the federal budget? In each of three budget clusters, the U.S Government should make adjustments in the way it is distributing money by making changes involving the Big Five, the Middle Five, and the Little Guys.

    Read More

  • IOUSA Summary

    570 Words  | 2 Pages

    This deficit has to do with having responsible leader who are willing to increase awareness and make beneficial changes in the nation. In my opinion, the federal debt is a serious threat to the US that must be politically address whenever possible. I believe that the candidates of the 2016 presidential election should make this issue one of the top priorities to discuss and to dictate a considerable amount of work to fix it. That is because the worse the federal debt is, the worse the future would be to the nation. Also, voters must be well educated about this issue in order to shape their decision in voting for the candidate that seems most powerful and confident about this problem. Solving this problem may be difficult and would take time and so much effort. Therefore, the changes and solution must be on both a national and individual levels as

    Read More

  • The Pros And Cons Of The Fairtax Act

    1563 Words  | 4 Pages

    Many debates have been waged over the decades on what will be taxed, on who shall be taxed and how taxes are collected. Since the 16th Amendment was ratified in 1913, the debate has intensified, centering on how high to make the income tax rate. Most Americans were not concerned since the Amendment was sold to them as something that would only affect corporations and the rich. With ever increasing fervor these corporations created lobbyists to convince Congress to exempt them from some or all of the income tax. The big breakthrough in this was taxing the worker directly with payroll taxes during World War II. This method of collecting income tax was sold to Americans as temporary, but Congress has extended it indefinitely and the public has become used to it. The next few decades saw the debate revolve around creating tax breaks for individuals in an attempt to modify behavior or spending. This has resulted in over 67,000 pages of tax code and an entire industry devoted to tax compliance and evasion, with the unintended behavioral change of corporations and the rich parking their money outside of the United States in small island nations to avoid taxation. These offshore accounts are estimated to hold $10 trillion dollars, a number approximate to the national debt. The FairTax Act should be enacted because it eliminates all federal income taxes for individuals and corporations, eliminates all federal payroll withholding taxes, abolishes estate and capital gains taxes and repeals the 16th Amendment; thus eliminating the need for offshore accounts.

    Read More

  • America's Tax System: Flat or Fair?

    672 Words  | 2 Pages

    Our current system of taxation is a varied rate percentage based on different income brackets. Many say that it violates our constitutional rights through unequal taxation. Multiple deductions, loopholes, special rates, and a complex system of regulations all characterize our Federal Income Tax System, prompting many to question why it is still being used (Peters, 2013). The current system although bringing in over $3 trillion, taxes income multiple times, and includes the taxing of estate, labor, savings, and investments (National Priorities Project, 2013). The system itself is complex with over 20,000 pages of regulations, requiring a massive filing system, which is set up and maintained by an even larger IRS, requiring over $225 billion in compliance costs (Hall, 2001). One can be hard pressed to find an advantage in the current system, other than the fact that it provides the government with an enormous amount of funds, and it has...

    Read More

  • The Australian Federal Government Budget

    2731 Words  | 6 Pages

    The Australian Budget is an annually published document which details the Federal Government's plans to affect the level of economic activity, resource allocation, and income distribution through the use of fiscal policy. It describes the framework which the government intends to follow during the next financial year which will result in the attainment of their objectives. The budget is a publication of the government's plans regarding the use of fiscal policy, and is published to parliament and the general public on “budget night”, so as to allow open dissemination about the status of public finances and to promote transparency in Australia's fiscal policy.

    Read More

  • Federal Budget Analysis

    551 Words  | 2 Pages

    The country needs to start monitoring how the government is spending the federal budget and they need to start splitting it fairly to benefit our country. 83% of the federal budget is spent on the Big Five which are the main expenses in the budget. We have to stop spending it all on the Big Five. Our government should really pay attention to what we need most of in this country and focus on the needs. The government needs to take away 20% of the Big Five and split it to categories that need it.

    Read More

  • The Evolution of the Federal Budget Process

    997 Words  | 2 Pages

    Federal spending is necessary for the economy and is essential to the accomplishment of national goals and advancement. This is why a budget is needed, however, there is no actual process mentioned in the Constitution that explains how Congress should do this. The Constitution states:

    Read More

  • Brief History of Taxing in the United States

    3332 Words  | 7 Pages

    ...o charities and health centers. The government should look to possibly allow for taxpayers to decide what happens with their money. Again, if the country truly wants to cut the budget deficit, it starts with removing some of the middle class benefits for which the wealthy are already struggling to pay. To raise taxes on the rich will only stunt economic growth and cut jobs, which are two key components to having a prosperous country. Success and development within a nation strictly comes from the power and wealth of the economy and the integrity of earning and deserving what one puts in through hard work. The United States lives by the American Dream, and as long as this drives the majority of individuals, there is no logical reason to take more than what is necessary, especially from the ones who have taken advantage of the opportunity the best.

    Read More

  • Pros And Cons Of Deficit Spending

    726 Words  | 2 Pages

    Deficit spending happens when a government grows its debt, meaning that its spending is greater than its income. Deficit Spending, 2008 Deficit spending is a fiscal policy, that when used appropriately can do some amazing things, like pull the United States up from its bootstraps effectively ending The Great Depression. President Hoover increased government spending by 50% and used the money to fund public works and infrastructure projects from 1928 to 1932. (Deficit Spending, 2008)

    Read More

  • The U.S Budget Deficit

    1510 Words  | 4 Pages

    The U.S budget deficit over the years has been a problem but lately the deficit has shrunk. However, what made the U.S budget deficit get to where it is today and what will it be like in the years to come. Throughout the past the U.S has operated under a deficit. This means that the U.S Spent more money than it was taking in. The cause of the excess in spending was different depending on which year. Some of the causes were war, increase in spending , and economic downturns. There were different acts passed to try and control the deficit problem. The deficit at the present time is declining. This decline is due to the improving economy, sequester, and a tax increase on high-income households. The big factor that went into the decline in the deficit for 2013 was the payment that Fannie Mae and Freddie Mac made. The deficit decline in the present time may make some think the U.S could get out of debt but it has been projected that the U.S deficit will start to increase once again.

    Read More

  • America The Unusual by John W Kingdon

    1398 Words  | 3 Pages

    The government of the United States of America is very unique. While many Americans complain about high taxes and Big Brother keeping too close an eye, the truth is that American government, compared to most foreign democracies, is very limited in power and scope. One area American government differs greatly from others is its scope of public policy. Americans desire limited public policy, a result of several components of American ideology, the most important being our desire for individuality and equal opportunity for all citizens. There are many possible explanations for the reason Americans think this way, including the personality of the immigrants who fled here, our physical isolation from other countries, and the diversity of the American population.

    Read More

  • Budget Analysis

    1842 Words  | 4 Pages

    Budgeting Assignment A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of a manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496)

    Read More

  • The Government's Effect on Everyday Life

    380 Words  | 1 Pages

    Thirdly I noticed that government effects how much money is deducted out of the paycheck I receive at work. The government deducts money for many different programs. One of those is the social security program. The social security program is made up of money deducted from everyone's pay this money is distributed when the employee becomes disabled, retires, or passes away. The money is there to protect the worker and their families if that person is no longer able to work. The government also takes money out of my pay for Medicare, Medicare is a program that provides medical care for people that can not afford it. There is also a federal income tax that is deducted and used for a various assortment of programs from road paving to bridge building and many other public needs.

    Read More

  • Tax Havens

    1230 Words  | 3 Pages

    A tax haven is a country that offers foreign corporations and individuals relatively low corporate and income tax rates, with a politically and economically stable environment. Some tax havens are Switzerland, Hong Kong, Bermuda, Ireland, and the Cayman Islands. The United States government has been fighting against the movement of corporations because it is not collecting taxes from these corporations that it could have used to reduce government debt. However, corporations have found loopholes that exempt them from United States tax laws. Companies are moving their headquarters across seas for tax benefits to keep their shareholders content. The United States government needs to reduce its corporate tax system so the country does not lose more companies, jobs, and money to foreign entities.

    Read More

  • Role Of Economics In Personal Finance

    735 Words  | 2 Pages

    The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.

    Read More

More about The Federal Budget Analysis

Open Document