please anwser questions 1-8 and the graphic organizer please

Focus Question: How do governments at different levels spend the money they take in through taxes? As you read the Lessons Summaries, take notes in the following chart to compare the way governments at the federal, state, and local levels raise and spend money. Federal State/Local Spending Taxes Taxes are payments that people are required to pay to a local, state, or national government. Taxes supply revenue, or income, to provide the goods and services that people expect from govern 2/ The Constitution grants and also limits the taxing power of Congress. The Constitution states that federal taxes must be used to pay the debts and provide for the common defense and general welfare of the United States." A tax must be the same in all states, and may not be placed on exports. The Sixteenth Amendment, ratified in 1913, gave Congress the power to levy an income tax. When government creates a tax, it decides on the tax base the income, property, good, or service that is subject to a tax. It also decides how to structure the tax. The three basic kinds of tax structures are proportional, progressive, and regressive. A proportional tax is a tax in which the percentage of income paid in taxes remains the same for all income levels. A progressive tax is one in which the percentage of income paid in taxes increases as income increases. An example is the federal individual income tax, the tax levied on a person's income. This tax has several tax brackets, so incomes above certain levels are subject to higher tax rates than those below. In a regressive tax, the percentage of income paid in taxes increases as income goes down. A sales tax, a tax on the value of a good or service being sold, is generally regressive because higher-income people usually pay a lower proportion of their incomes on goods and services subject to the tax. Lesson Vocabulary taxes a required payment to a local, state, or national government tax base the income, property, good, or service that is subject to a tax proportional tax a tax for which the percentage of income paid in taxes remains the same at all income levels progressive tax a tax for which the percentage of income paid in taxes increases as income increases individual income tax a tax based on a person s earnings regressive tax a tax for which the percentage of income paid in taxes decreases as income increases sales tax a tax based on goods or services that are sold The federal government has several sources of income. The largest is the individual income tax, which provides nearly half of federal tax receipts. It is collected on a "pay-as-you-earn" system throughout the year, mostly by employers withholding, or taking out part of an employee's income and sending it to the federal government. At the end of the year, taxpayers fill out a tax return, a form in which they declare all income and figure out their total tax. Depending on how much was withheld, the taxpayer may get a refund or owe additional taxes. Taxable income is a person's gross, or total, income minus exemptions and deductions. Gross income includes income froi salaries, wages, tips, and commissions, as well as from interest on savings accounts and stock dividends. Personal exemptions are set amounts that can be subtracted from gross income for the taxpayer and each family member. Tax deductions are certain expenses or payments made by a taxpayer that can deducted from gross income, including interest paid on a mortgage, donations to charity, and state and local tax payments. Some taxpayers may receive tax credits, which is an amount taken directly off a person's total tax. For example, people may get a tax credit for some child care expenses or tuition payments. Corporations pay a corporate income tax on their income. The corporate income tax makes up about 11 percent of federal receipts. Like personal income taxes, corporate income tax rates increase as profits increase. (Continues on the next page.) Lesson Vocabulary withholding taking tax payments out of an employee's pay before he or she receives it tax return a form used to file income taxes taxable income the earnings on which tax must be paid; total income minus exemptions and deductions personal exemptions a set amount that taxpayers may subtract from their gross income for themselves, their spouse, and any dependents tax deductions a variable amount that taxpayers may subtract from their gross income tax credits a variable amount that taxpayers may subtract from the total amount of their income tax The Federal Insurance Contributions Act, or FICA, taxes are also withheld from people's paychecks. FICA taxes fund Social Security, which was established in 1935 as a retirement fund for workers. Now it also provides benefits to wage earners' surviving family members and people with disabilities. FICA taxes also fund Medicare, a national health insurance program for people over age 65 and those with certain disabilities. There are several other types of federal taxes that bring relatively little revenue. These include the estate tax, which is a tax on the total value of a deceased person's estate, and the gift tax on money or property a living person gives to another. Lesson Vocabulary estate tax a tax on the total value of the money and property of a person who has died gift tax a tax on the money or property that one living person giv to another The federal government spends nearly four trillion dollars a year. About two thirds of its spending, however, is "mandatory." Mandatory spending is money lawmakers are required by law to spend in certain amounts for certain programs and for interest payments on the national debt. Most mandatory spending is for entitlements, which are benefits to which anyone who meets the program requirements is entitled by law. Spending on entitlement programs rises as the number of eligible people rises. The largest entitlement programs are Social Security, Medicare, and Medicaid, which provides health insurance to low-income families. Other mandatory spending programs include the Supplemental Nutrition Assistance Program and the National School Lunch Program. Mandatory spending also includes retirement benefits and insurance for federal workers, veterans' pensions, and unemployment benefits. Discretionary spending is spending for which government can make choices. It accounts for about a third of federal spending Discretionary spending includes defense spending, education, national parks and monuments, transportation, disaster aid, foreign aid, and many other items. The federal government also provides aid to state and local governments and shares the costs for some programs with them. Examples include highway construction and low-income housing. Lesson Vocabulary mandatory spending spending that Congress is required by existing law to do entitlements social welfare programs that people are "entitled to" benefit from if they meet certain eligibility requirements discretionary spending spending about which Congress is free to make choices State governments prepare two budgets, or estimates of future revenues and expenses. The operating budget pays day-to day expenses, such as salaries of state employees and computers for offices. The capital budget pays for major capital, or investment, spending. New bridges and buildings are examples of capital spending. Most states have laws requiring a balanced budget-a budget in which revenue is equal to spending. This rule applies only to the operating budget. While tax policies and spending differ among states, most spend the largest amounts on education, public safety, highways, and public welfare. Public safety includes state police, crime labs, and corrections systems. States also build and maintain highways and roads, often with federal assistance. They support health and welfare programs and maintain parks and recreation facilities. States get revenue several ways. All but five states have a sales tax. States may also have excise taxes, state income taxes, taxes on real property, such as land and buildings, and personal property, such as furniture and jewelry. Most states collect corporate income taxes and license fees. Local governments-towns, cities, townships, counties, and special districts-also collect taxes. These taxes support public schools, law enforcement, fire protection, libraries, airports, public hospitals, parks, public transportation, and more. The main source of local revenue is property taxes, a tax on the value of a property. Property taxes are paid by people who own homes, apartments, buildings, or land. An official called a tax assessor determines the value of the property. Local governments may also levy sales taxes, excise taxes, and income taxes. Lesson Vocabulary 6/8 budget an estimate of future revenue and expenses operating budget a budget for day-to-day spending needs capital budget a budget for spending on major investments balanced budget a budget in which revenue and spending are equal real property land and any permanent structures on the land to which a person has legal title personal property movable possessions or assets tax assessor an official who determines the value of property Lesson 1: Understanding Taxes 1. Use context clues about the nature of progressive taxes to come up with a definition of the word progressive. 2. Compare and Contrast How are progressive, proportional, and regressive taxes similar? How are they different? Lesson 2: Federal Taxes 3. What are some steps a person can take to reduce his or her taxable income? 4. Determine Central Ideas Identify the common purpose of Social Security and Medicare taxes. Lesson 3: Federal Spending 5. What is the difference between mandatory and discretionary spending? 6. Draw Conclusions Why do you think that the percentage of federal spending that is mandatory has grown in recent years? Lesson 4: State and Local Taxes and Spending 7. Suppose your state wanted to build a new public hospital to serve a rural area. From which budget-operating or capital-would this project be funded? Explain your answer. 8. Draw Conclusions Why does every state support at least one public university? What benefit does the state receive from this expense