<< Chapter < Page Chapter >> Page >

Supply-siders, on the other hand, prefer regressive tax    systems, which lower the overall rate as individuals make more money. This does not automatically mean the wealthy pay less than the poor, simply that the percentage of their income they pay in taxes will be lower. Consider, for example, the use of excise taxes    on specific goods or services as a source of revenue.

“Excise tax,” https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Excise-Tax (March 1, 2016).
Sometimes called “sin taxes” because they tend to be applied to goods like alcohol, tobacco, and gasoline, excise taxes have a regressive quality, since the amount of the good purchased by the consumer, and thus the tax paid, does not increase at the same rate as income. A person who makes $250,000 per year is likely to purchase more gasoline than a person who makes $50,000 per year ( [link] ). But the higher earner is not likely to purchase five times more gasoline, which means the proportion of his or her income paid out in gasoline taxes is less than the proportion for a lower-earning individual.

An image of a gas pump that reads “$12.00 Sale, 3.752 Gallons”.
A gas station shows fuel prices over $3.00 a gallon in 2005, shortly after Hurricane Katrina disrupted gas production in the Gulf of Mexico. Taxes on gasoline that are based on the quantity purchased are regressive taxes.

Another example of a regressive tax paid by most U.S. workers is the payroll tax that funds Social Security. While workers contribute 7.65 percent of their income to pay for Social Security and their employers pay a matching amount, in 2015, the payroll tax was applied to only the first $118,500 of income. Individuals who earned more than that, or who made money from other sources like investments, saw their overall tax rate fall as their income increased.

In 2015, the United States raised about $3.2 trillion in revenue. Income taxes ($1.54 trillion), payroll taxes on Social Security and Medicare ($1.07 trillion), and excise taxes ($98 billion) make up three of the largest sources of revenue for the federal government. When combined with corporate income taxes ($344 billion), these four tax streams make up about 95 percent of total government revenue. The balance of revenue is split nearly evenly between revenues from the Federal Reserve and a mix of revenues from import tariffs, estate and gift taxes, and various fees or fines paid to the government ( [link] ).

A chart titled “Funding for the U.S. Government as % of Total Revenue, 2015”. From left to right, “Other, 6.2%”, “Excise taxes, 3%”, “Corporate income taxes, 10.6%”, “Payroll taxes, 32.8%”, and “Individual income taxes, 47.4%”. At the bottom of the chart, a source is listed: “Pew Research Center. “How the U.S. government is funded.” March 20, 2015.”.

The federal reserve board and interest rates

Financial panics arise when too many people, worried about the solvency of their investments, try to withdraw their money at the same time. Such panics plagued U.S. banks until 1913 ( [link] ), when Congress enacted the Federal Reserve Act . The act established the Federal Reserve System, also known as the Fed, as the central bank of the United States. The Fed’s three original goals to promote were maximum employment, stable prices, and moderate long-term interest rates.

“U.S. Code § 225a - Maintenance of long run growth of monetary and credit aggregates,” https://www.law.cornell.edu/uscode/text/12/225a (March 1, 2016).
All of these goals bring stability. The Fed’s role is now broader and includes influencing monetary policy (the means by which the nation controls the size and growth of the money supply), supervising and regulating banks, and providing them with financial services like loans.

Questions & Answers

prostaglandin and fever
Maha Reply
Discuss the differences between taste and flavor, including how other sensory inputs contribute to our  perception of flavor.
John Reply
taste refers to your understanding of the flavor . while flavor one The other hand is refers to sort of just a blend things.
Faith
While taste primarily relies on our taste buds, flavor involves a complex interplay between taste and aroma
Kamara
which drugs can we use for ulcers
Ummi Reply
omeprazole
Kamara
what
Renee
what is this
Renee
is a drug
Kamara
of anti-ulcer
Kamara
Omeprazole Cimetidine / Tagament For the complicated once ulcer - kit
Patrick
what is the function of lymphatic system
Nency Reply
Not really sure
Eli
to drain extracellular fluid all over the body.
asegid
The lymphatic system plays several crucial roles in the human body, functioning as a key component of the immune system and contributing to the maintenance of fluid balance. Its main functions include: 1. Immune Response: The lymphatic system produces and transports lymphocytes, which are a type of
asegid
to transport fluids fats proteins and lymphocytes to the blood stream as lymph
Adama
what is anatomy
Oyindarmola Reply
Anatomy is the identification and description of the structures of living things
Kamara
what's the difference between anatomy and physiology
Oyerinde Reply
Anatomy is the study of the structure of the body, while physiology is the study of the function of the body. Anatomy looks at the body's organs and systems, while physiology looks at how those organs and systems work together to keep the body functioning.
AI-Robot
what is enzymes all about?
Mohammed Reply
Enzymes are proteins that help speed up chemical reactions in our bodies. Enzymes are essential for digestion, liver function and much more. Too much or too little of a certain enzyme can cause health problems
Kamara
yes
Prince
how does the stomach protect itself from the damaging effects of HCl
Wulku Reply
little girl okay how does the stomach protect itself from the damaging effect of HCL
Wulku
it is because of the enzyme that the stomach produce that help the stomach from the damaging effect of HCL
Kamara
function of digestive system
Ali Reply
function of digestive
Ali
the diagram of the lungs
Adaeze Reply
what is the normal body temperature
Diya Reply
37 degrees selcius
Xolo
37°c
Stephanie
please why 37 degree selcius normal temperature
Mark
36.5
Simon
37°c
Iyogho
the normal temperature is 37°c or 98.6 °Fahrenheit is important for maintaining the homeostasis in the body the body regular this temperature through the process called thermoregulation which involves brain skin muscle and other organ working together to maintain stable internal temperature
Stephanie
37A c
Wulku
what is anaemia
Diya Reply
anaemia is the decrease in RBC count hemoglobin count and PVC count
Eniola
what is the pH of the vagina
Diya Reply
how does Lysin attack pathogens
Diya
acid
Mary
I information on anatomy position and digestive system and there enzyme
Elisha Reply
anatomy of the female external genitalia
Muhammad Reply
Got questions? Join the online conversation and get instant answers!
Jobilize.com Reply

Get Jobilize Job Search Mobile App in your pocket Now!

Get it on Google Play Download on the App Store Now




Source:  OpenStax, American government. OpenStax CNX. Dec 05, 2016 Download for free at http://cnx.org/content/col11995/1.15
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'American government' conversation and receive update notifications?

Ask