Coursework Assignment

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Coursework Assignment
Q1. What is the difference between a progressive tax and a regressive tax?
A progressive tax takes larger amounts of income percentages from the taxpayers depending on the rising of their salary. The regressive tax is the opposite of progressive tax where the taxpayers who earn high-income pay less percentage of tax than the low-income taxpayers (Wilson, 2016).
Q2. The payroll taxes support which three major social welfare programs?
The payroll taxes are involved in supporting the unemployment compensation program, Medicare, and the unemployment insurance program.
Q3. What are the four constitutional limitations on the power to tax?
All taxes that are indirect should impose at the same rate throughout the state
Taxes are only levied for the best interest of the public and not the interests of the private sectors
It is prohibited to impose tax on exports
The taxes imposed should be evenly apportioned among the nations
Q4. What is the one implied limitation that power?
The local governments and the State cannot be taxed when using the funds for government operations that concern the public such as education and healthcare enhancements.
Q5. Demonstrate Reasoned Judgment: Which do you think is more air, a direct or an indirect tax? Explain
The indirect tax is more air because it is levied on spending such as the Value Added Tax and services. The indirect tax may be changing the demand curve for consumers through the varying prices and thus affecting the customer’s spending decision.

Q6. What is the difference between an annual deficit and the public debt?
The annual deficit is the disparity between what is taken by the American government from taxes and another form of revenues known as expenditure and receipts. The items that are included in the deficit are recognized as either off-budget or on-budget. The public debt, on the other hand, is the accumulated deficits in addition to the off-budget surpluses. Often, the on-budget deficit needs the treasury of USA to borrow funds to raise the money required to keep the government in operation. The government borrows money through selling securities to the public. Therefore, the securities issued by the Treasury to the public and the government eventually become part of the total debt (Wilson, 2016).
Q7. How does the Federal Government borrow money?
The USA Treasury issues government debt which is managed by the Bureau of the Fiscal Service. Its responsibility is to keep records, the sale of the debt, and handle pay back the individuals who loan the government funds. The type of debts issued involve the Treasury securities such as the notes, inflation-protected security, bills, and bonds.
Q8. Why can it do so at a lower interest rate than can private borrowers?
The Federal Government is capable of borrowing funds at a lower rate of interest than the private borrowers because most of the investors find federal government securities safer than those issued by the U.S.
Q9. How could the Federal Government create a budget surplus?
The change of economic aspects and changes in government spending generates the budget surplus. The budget surplus can be created by minimizing costs and government spending. Further, increase in taxes generates a surplus.
Q10. Do you think deficit financing is an acceptable method to fund the Federal Government? Explain why or why not?
In practice, deficit financing demonstrates that the government is spending more funds than it receives in the form of revenues. The deficit financing is as a result of the inefficiency of government and reflects the evasion of taxes or unnecessary spending. As such, the slow growth of the capital market can significantly make the government go into debt particularly to foreign creditors. Therefore, deficit financing may be an acceptable method of funding the government however it is costly and shows inefficiency of government operations (Wilson, 2016).
Q11. Why controllable spending sometimes is referred to as “discretionary spending”?
The term discretionary spending is used to describe spending on the budget items such as the highway projects, pay for civil services and national parks that are controlled or the choices are made by the President and the Congress.
Q12. What is the purpose of a continuing resolution?
Continuing resolution refers to the emergency legislation that is passed by the Congress to finance the Federal agencies whose finance appropriations have not yet been passed into law. Therefore, the continuing resolution is purposed for ending the debate over the budget and prevent a government shutdown. The Congress extend the current operating budget for the next year.
Q13. Describe the basic steps involved in creating the federal budget?
To begin with, the President issues a budget bid to the Congress at the beginning of every fiscal period. Secondly, the budget resolutions are passed by the House and Senate through voting. Thirdly, the bill appropriations are determined by the appropriation committees and permit spending. Fourthly, the House and the Senate vote for the appropriations bills and the differences are reconciled. The last phase involves the signing of each appropriation bill by the president, and this makes the budget to become law.
Q14. What programs do you think are considered high priorities by most Americans?
The programs considered of high priority are such as the health care programs, reduction of workplace harassment and discrimination, and poverty aspects as well as state security.
Q15. How are these priorities taken into account during the creation of the federal budget?
These issues are discussed by the House and the Congress on ways they can be tackled and fit in the federal budget.
Q16. What is the gross domestic product?
Gross domestic product refers to the total value of commodities that are produced and the services offered in a state during a certain fiscal year.
Q17. What is the difference between inflation and deflation?
Inflation occurs as a result of the rise in prices of commodities and services while deflation is when the prices of commodities and services decrease.
Q18. How can the use of fiscal policy and monetary policy influence the overall national economy?
The fiscal policy is subject to the government spending and taxing. When the government desires to stimulate the economic growth, it increases spending by the public through demand for products and services and this stimulates production thus leading to employment. Monetary policy is subject to interest rates and supply of money. The interest rates highly determine the increase or decrease of money in public circulation thus affecting the economic trends (Wilson, 2016).
Q19. What are the three main economic goals the government aims to achieve? Why do you think these goals are critical to a healthy economy?
The three major economic goals are full employment, economic growth and stabilizing of prices. They are critical because it reduces aspects of inflation, poverty and increases gross domestic production which is essential for the healthy economy.

Reference
Wilson, James Q., Diiulio, John J., Jr., Bose, Meena, and Levendusky, Matthew S. (2016). American Government: Institutions and Policies. Wadsworth Pub Co.