Taxes

the change in your tax obligation as income rises—it's how much tax you pay on the last dollar you earn.

how much total tax you pay divided by how much taxable income you earn.

Income taxes that increase with income, reflecting the idea that the more disposable income you have, the more you can afford to give to the government.

A tax system where the effective rate decreases as the taxed amount increases, such as a flat tax.

Funds Social Security and Medicare, paid by both employers and employees.

A 2009-2012 reduction of the employee's portion from 6.2% to 4.2%, saving individuals an average of \$1,000.

A percentage of money made from selling assets, seen as a disincentive to sell and primarily benefiting the wealthy.

Created in the 1980s to ensure high earners with significant deductions still paid some income tax.

A tax on the net worth of a deceased individual's estate, opposed by conservatives and libertarians.

Taxes capital gains on assets from the point of inheritance.

Taxes gains from the asset's original acquisition price, considered impractical due to record-keeping challenges.

Established a 10% income tax bracket, increased childcare tax credit, and mitigated the marriage penalty.

Congressional Democrats supported cuts for low- and middle-income citizens but opposed those for the wealthy.

Most cuts were set to expire in 2010 or 2011 due to lack of support from moderate Democrats.

The top 10 percent of earners received 81.8 percent of the benefit from the cuts on investment taxes.

Tax cuts for low- and middle-income families are more likely to be spent, stimulating the economy.

Republicans argued the cuts paid for themselves through economic growth, but even conservative institutions disagreed.

Beliefs that taxes encourage a bloated bureaucracy and lead to less free governments.

The idea that taxes are a fetter to the free market, which will do best and produce most with the least regulation.

Those who believe in the power of the market to right all wrongs.

An economic policy that includes Supply-Side and Trickle-Down economics.

Focuses on cutting marginal tax rates to incentivize work and efficiency, arguing high rates deter people from working harder.

Posits that wealth at the top drips down to the lower levels through spending and investment, advocating for lower taxes on corporations and the wealthy.

Some Republicans believe taxes are unfair because the rich pay more than the poor in absolute terms.

The belief in giving back privately, often through faith-based organizations.

Taxes fund infrastructure, legal systems, educational resources, and economic opportunities.

The belief that those who have done well in life feel it is their moral obligation to help others through taxes.

Focus on relative terms, arguing that those who make more and have more should contribute more.

The belief that the government can fix problems.

Obama's proposal that those who make over \$1 million a year should pay at least 30 percent of their income in tax.

Occurs when the government spends more than it brings in.

Occurs when federal income is greater than spending.

An aggregate measure of all the government's accumulated debt, including the interest owed on borrowed money.

A number over which the nation's debt is not allowed to reach, determined by Congress.

Unwillingness to tax at the rate we spend and rising fixed costs of entitlement programs.

Mandatory spending accounts for almost two-thirds of federal dollars.

Eighty million Baby Boomers will be eligible for benefits from Social Security and Medicare over the next twenty years.

Funded by payroll taxes, but current contributions pay for current retirees.

Projected to drop from 15:1 at program start to 2:1 by 2025.

The Treasury's general fund borrows from the Social Security trust fund, leaving certificates that are nothing more than certificates.

Fear that deficits are effectively being robbed.

Described as the 'eight-hundred-pound gorilla in the budget' due to ballooning costs driven by marketing, research, and increased use of expensive technology.

Accounts for about one-third of the federal government's overall outlay, including defense, parks, and schools.

Believe deficits from tax cuts don't matter because the cuts will spur economic growth, ultimately paying for themselves.

See deficits as a good thing because they force the government to cut services.

Points to Reagan's 1981 tax cuts, which drove deficits to record highs followed by economic growth as evidence that deficit spending can help kick-start growth.

Deficits are acceptable if borrowed money is invested in order to grow the economy.

If the debt doesn't grow faster than GDP, we're okay; if it outpaces GDP, there's cause for worry.

High deficits and debt can crowd out other forms of investment by raising interest rates.

Individuals who want to minimize deficits and debt, historically Republican but now many are Democrats.

The US borrows heavily from other countries, with China being the biggest holder of American debt at \$1 trillion.

Being a debtor nation means lender countries inherently have some control over our economy.

Lowering interest rates lowers the value of the dollar and makes US debt less attractive to foreign holders.

A weak dollar makes US exports cheap and imports more expensive, which can stimulate the domestic economy.

Oil is tied to the greenback, insulating Americans from currency fluctuations in oil prices.

A weak dollar makes oil relatively cheap for others, increasing demand and driving up prices.

Russia and Iran have sought to denominate oil in other currencies, which could significantly increase oil prices for Americans.

Tied to the American recession, partly due to German banks' investment in US mortgage-backed securities.

Germany, an export economy, lent money to Southern European states to facilitate consumption of German goods.

When the American recession hit, German banks lost money, European consumption decreased, and German banks had less to lend.

Greece's protests against proposed austerity measures highlight the debate over cutting spending versus injecting more cash.

The European Union lacks a central bank with a mandate like the US Fed, making bailouts more challenging.

Being stuck in the euro prevents individual nations like Greece from devaluing their currency to mitigate the crisis.

Raises questions about the morality of loans, arguing that lenders also assume risk and the long-term burden on citizens can feel unfair.