American Government Assignment

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American Government Assignment
Question 1
Progressive taxes are taxes whose rate increase as the income or wealth of the taxpayer increases while regressive taxes are taxes whose rate increase as the income or wealth of the taxpayer decreases.
Payroll taxes support the basic social security program, the Medicare program, and the unemployment compensation program. The social security program endorses the old-age, survivors, and the disabled.
The four constitutional limitations implemented on the power to tax are.
Levied tax can only be used for public purposes and not for private interests.
Customs duties can only be levied on imports and should not be applied to exports
The allocation of direct taxes must be equal.
Indirect taxes collected by the federal government should apply the same tax rate across the country.
The implied limitation on the power to tax is that the states and local government cannot be taxed by the federal government when implementing government functions such as the provision of education, health services, or security.
Based on reasoned judgment, indirect taxes are fairer than direct taxes. Unlike the direct taxes, indirect taxes can effortlessly be collected as they are included in the price of the goods and services being consumed. Since the direct taxes are imposed on the commodities, it is also easier to use them in controlling the consumption of harmful goods such as cigarettes and alcohol thereby serving a social purpose.

Question 2
Public debt refers to the total amount the government owes the public plus the interests accrued while the annual deficit refers to the money borrowed by the government every year when the expenditure exceeds the receipts.
The government uses the sale bonds and other Treasury securities to borrow money from the public. The government can borrow the money at a lower interest than private borrowers as it has unlimited revenue from tax collection and therefore cannot go out of business.
The government creates a budget surplus by saving more of its revenue rather than spending it.
Deficit financing is not an acceptable method of funding the federal government as it can place the government in debt with foreign creditors. It is also an indicator of government inefficiency, widespread tax evasion, and wasteful spending.
Question 3
Controllable spending is sometimes referred to as discretionary spending as the federal government can make decisions and change it whenever it wishes.
The purpose of the continuing resolution is to pass legislation if the Congress fails to do to keep the operations of the federal government running.
The creation of a federal budget involves presenting the budget, creating a budget solution, setting appropriations, and approving the final budget.
Most of the Americans consider health care, unemployment, and security programs as the most critical and they think that the plans should be prioritized when creating the federal budget. When creating the budget, the federal government, therefore, divides the budget into discretionary and mandatory whereby health care, unemployment, and social security falls under the mandatory spending.
Question 4
Gross Domestic Product refers to the total value of goods and services produced by a state within a given period.
Inflation refers to the persistent rise in prices as a result of an increase in the volume of money thereby resulting in the loss of value of the currency. On the other hand, deflation refers to the consistent decline of price levels.
The use of the fiscal policy and monetary policy influence the economy by reducing cyclical fluctuations within the economic cycle. The fiscal policy achieves this by reducing the budget deficit while the monetary policy reduces the inflationary pressure.
The three primary economic goals the government aims to achieve are stable prices as to counter inflation, create employment, and stimulate economic growth (Buck). The three goals are critical as they influence the living standards.

Work Cited
Buck John. “The three primary macroeconomic policy goals are economic growth, low unemployment and low inflation.” Economic Perspectives. March 17, 2008. Accessed (February 6, 2018) http://econperspectives.blogspot.co.ke/2008/03/13-three-primary-macroeconomic-policy.html