Perhaps one of the most pressing issues facing government is how much to tax their citizens.Before you decide how much the U.S. should tax citizens income, it is important to start with context of the U.S. fiscal situation. You should open the U.S. Debt Clock Links to an external site.to examine the current U.S. federal budget deficit . You should also check the U.S. national debt, which is the total outstanding debt the national government owes (each single year deficit adds to the national debt).

1) What is a budget deficit? (Definition)

2) What is the current U.S. budget deficit? U.S. Debt ClockLinks to an external site.

3) What is National/public debt? (Definition)

4) What is the current U.S. national/public debt? U.S. Debt ClockLinks to an external site.

Before we can make prudent decisions on what to do about taxes we should consider how tax rates and the highest tax rates have varied over U.S. history.

5) What has been the highest marginal tax rate in U.S. history and what is the current highest marginal tax rate? Use this website to assist you: Historical Highest Marginal Income Tax Rates Links to an external site..

Read the website: How Would Higher Interest Rates Affect Interest Payments? | Committee for a Responsible Federal Budget

6) How might rising interest rates impact the following the national budget and the U.S. economy?

Next, we should examine how U.S. taxes compare to other countries. Browse links A & B and answer the question below: Tax-to-GDP ratio of OECD Countries Links to an external site.Global Revenue Statistics DatabaseLinks to an external site.

7) How do taxes in the U.S. compare to other countries in the world (we are trying to compare apples to apples, so are really just looking at other advanced industrialized countries).

8) Read the link below and identify two potential tax changes that you think we should borrow from another country and explain why:

A) How to Think About Taxing and Spending like a SwedeLinks to an external site.

Open the link: A closer look at who does (and doesn't) pay U.S. federal income tax Links to an external site.. Based upon this data do you think taxes should go up or down? You should clarify if you prefer tax cuts or increases on various income groups. For example, perhaps I think taxes should go down on those who make more than $2,000,000 dollars and taxes should go up on those that make less than $40,000. I would support this selection with the strongest arguments for my decision by addressing the following points: what I think is fair and why, what my suggestions might do to the budget deficit, and what it might do to economic growth.

9) Should taxes go up or down and on which income groups?

10) Why is the choice you made fair and why?

11) What might your choices do to the budget deficit and why?

12) What might your choices do to economic growth and why?

Read the article: Why America's return to $1 trillion deficits is a big problem for you Links to an external site.. Heather Long. Washington Post. 4/9/18 (This first article is two years old, but I want you to understand the context this article provides. Now consider that the deficit is exploding to deal with the Covid-19 Pandemic) Here is a link to a more recent segment of an article: Coronavirus Crisis Legacy: Mountains of Debt. Jon Hisenrath. Wall Street Journal. 4/9/2020Links to an external site.

13) What are the potential negatives associated with budget deficits according to the article?

14) Could there be potential positives associated with budget deficits? You should think about Keynsian economics and when it is acceptable to run large deficits.

15) What are the implications for younger Americans according to the article?

16) According to the article why does the U.S. have large deficits and national debt?

17) What potential solutions does the U.S. have to address increasing deficits?

In order to get a better understanding of where you federal tax dollars go, open the link Where Tax Dollars Went in 2017 Links to an external site.to answer question #6-#8.

18) What is your reaction to the data from this website? What comments or questions do you have?

19) What areas do you think are too high?

20) Are there any areas that you would increase spending in?

Finally, based upon what you have learned regarding fiscal policy: revenue and spending, you should open the link:Federal Budget Challenge Links to an external site.. You only need to enter a 5 digit zip code to start. Simply type in any 5 digits and click next, you don't have to answer any other questions regarding personal information.

This website starts with the assumption that the projected deficit over the next decade will be approximately 11.6 trillion (averaging 1.16 trillion per year deficit). This website provides many different options you can choose from to reduce the projected deficit over the next decade. These are not the only options Congress could potentially choose from, but do include major categories of revenue and spending. As you make individual choices you can see the impact it has on the 10 year projection under my budget on the far right in red. Keep in mind there are many tradeoffs with the choices you are deciding between. Some choices are considered investments and will actually add to the deficit, but might improve infrastructure, citizens quality of life and that may improve economic growth or society in the future. As easy as it might be to click on an individual option, please keep in mind there are also downsides to your choices. You may be asking people to pay more in taxes, receive less in benefits that have counted on, etc. The fact that Congress hasn't acted on most of these options already is in large part due to their concern that they wouldn't be popular and could lead to them losing reelection. You should click on the pro/con choices to learn more about the potential trade-offs of the challenging options you are considering. This will provide the basis for the choices you make and the arguments to support your decisions.

21) When you have completed the task you should copy and paste the summary of your spending and revenue selections below (it will have subtotals for revenue and spending as well as total deficit deduction.

22) Justify your fiscal choices by explaining why you decided to make the choices that you did, for example why you focused more on cutting spending or raising revenue.

23) Ask one of the older people you know, family member or friend and ask them what role government policies (for example, Social Security, Medicare, GI Bill, etc.) has made in their life in the U.S.

24 What role has government policies made in your life? Consider the saying, "You get what you pay for." Do you think you and the rest of America are getting the appropriate policies, benefits and services for what you and others are paying in taxes? Explain.