UVA ECON 2020 - 10-1-2012Handout (5 pages)

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10-1-2012Handout



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10-1-2012Handout

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Pages:
5
School:
University Of Virginia
Course:
Econ 2020 - Principles of Economics: Macroeconomics

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Federal Budget Fiscal Policy Elias Yannopoulos October 1 2012 Elias Yannopoulos Fiscal Policy Federal Budget Federal Budget Federal Budget Government s plan for outlays and revenues Outlays Spending and transfer payments Revenues money from taxes Discretionary vs Mandatory outlays Discretionary outlays can be adjusted year to year Mandatory outlays predetermined expenses based on existing laws Ex Social Security Medicare Elias Yannopoulos Fiscal Policy Federal Budget Taxes Taxes are where the government generates its revenue to pay for the outlays There are several different types of taxes the largest two are personal income and social security Progressive Income Tax tax rates rise with income Marginal Tax Rate tax rate of the next dollar of income Average Tax rate total tax bill as a portion of income Elias Yannopoulos Fiscal Policy Federal Budget US Taxes US Marginal Tax Rates 10 15 25 28 33 35 on on on on on on taxable taxable taxable taxable taxable taxable income income income income income income from 0 to 8 700 over 8 700 to 35 350 over 35 350 to 85 650 over 85 650 to 178 650 over 178 650 to 388 350 over 388 350 Elias Yannopoulos Fiscal Policy Federal Budget Example Ex 50 000 of taxable income 10 8 700 870 15 35350 870 15 26650 3997 50 25 50000 35350 25 14850 3662 50 Total tax bill 8530 Marginal tax rate 25 Average tax rate 8530 50000 100 17 06 Elias Yannopoulos Fiscal Policy



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