Constitution for the United Constitution for the United States of AmericaStates of America

We the People of the United States, in We the People of the United States, in Order to form a more perfect Union, Order to form a more perfect Union,

establish Justice, insure domestic establish Justice, insure domestic Tranquility, provide for the common Tranquility, provide for the common

defence, promote the general Welfare, defence, promote the general Welfare, and secure the Blessings of Liberty to and secure the Blessings of Liberty to ourselves and our Posterity, do ordain ourselves and our Posterity, do ordain and establish this Constitution for the and establish this Constitution for the

United States of America.United States of America.

wel·farewel·fare   Health, happiness, and good   Health, happiness, and good fortune; well-being. Prosperity. fortune; well-being. Prosperity.

pos·ter·i·typos·ter·i·ty   Future generations:   Future generations: “Everything he writes is consigned to “Everything he writes is consigned to posterity” (Joyce Carol Oates). All of a posterity” (Joyce Carol Oates). All of a

person's descendants. person's descendants.

tran·quil·li·tytran·quil·li·ty The quality or state of The quality or state of being tranquil; a state of peace, serenity.being tranquil; a state of peace, serenity.

de·fense de·fense Variant: Variant: or chiefly Britishor chiefly British de·fence:de·fence: a means or method of a means or method of

protecting the physical or functional protecting the physical or functional integrity of body or mindintegrity of body or mind

What do Americans want What do Americans want from the government?from the government?

ProtectionEducationFreedom – to do what?EquityFinancial Security

The Federal Government The Federal Government Dollar- Where it Comes Dollar- Where it Comes FromFrom

• Where does their money come from?Where does their money come from?

• Personal income taxesPersonal income taxes 44 44 percentpercent

• Social Security contributionsSocial Security contributions 37 37 percentpercent

• Corporate Income taxesCorporate Income taxes 13 percent13 percent

The Federal Government The Federal Government Dollar— Where it GoesDollar— Where it Goes

• How does the Federal Government spend the revenue?How does the Federal Government spend the revenue?

• Defense $696Defense $696 23 percent23 percent

• Social Security Social Security 20 percent20 percent

• MedicareMedicare 13 percent13 percent

• MedicaidMedicaid 7 percent7 percent

• Interest Interest 8 percent8 percent

•   

• World Spending on Military – approximately 1.4 trillion, US 49 percentWorld Spending on Military – approximately 1.4 trillion, US 49 percent

• What do you think of their blend of spending?What do you think of their blend of spending?

Who pays the taxes in the Who pays the taxes in the U.S.?U.S.?

1999 (Projected) Income Tax Burden

Graph 1C: The tax burden. Projected income tax burden for 1999.

  Number of Returns with Positive AGI

AGI ($ millions) Income Taxes Paid ($

millions) Group's Share of Total

AGI Group's Share of Income Taxes

Income Split Point Average Tax Rate

All Taxpayers

130,371,156 $6,875,123 $831,890 100.00% 100.00% - 12.10%

Top 1%

1,303,712 $1,306,417 $306,902 19.00% 36.89% > $328,049 23.49%

Top 2-5%

5,214,846 $993,178 $168,322 14.45% 20.23%   16.95%

Top 5%

6,518,558 $2,299,595 $475,224 33.45% 57.13% > $137,056 20.67%

Top 6-10%

6,518,558 $749,680 $92,049 10.90% 11.07%   12.28%

Top 10%

13,037,116 $3,049,275 $567,273 44.35% 68.19% > $99,112 18.60%

Top 11-25%

19,555,673 $1,497,126 $138,642 21.78% 16.67%   9.26%

Top 25%

32,592,789 $4,546,401 $705,915 66.13% 84.86% > $60,041 15.53%

Top 26-50%

32,592,789 $1,406,380 $98,556 20.46% 11.85%   7.01%

Top 50%

65,185,578 $5,952,781 $804,471 86.58% 96.70% > $30,122 13.51%

Bottom 50%

65,185,578 922,342 27,419 13.42% 3.30% > $30,122 2.97%

Table 1. Summary of Federal Individual Income Tax Data, 2004 (Updated September 2006) Source: Internal Revenue Service

State and Local Governments State and Local Governments

• Where does their money come fWhere does their money come fromrom??

• Federal RevenueFederal Revenue 21 percent21 percent

• Individual income taxes Individual income taxes 12 percent12 percent

• Sales TaxSales Tax 19 percent19 percent

• Property TaxProperty Tax 16 percent16 percent

• Corporate Income taxCorporate Income tax 2.5 2.5 percentpercent

• How do State and Local governments How do State and Local governments spend the revenue?spend the revenue?

• EducationEducation 29 percent29 percent

• WelfareWelfare 15 percent15 percent

• HighwaysHighways 5.5 percent5.5 percent

• Public SafetyPublic Safety 3 percent3 percent

• Insurance Insurance 8 percent8 percent

Do you think the State and Do you think the State and Local government are Local government are spending the money on the spending the money on the appropriate items?appropriate items?• according to the US dept of Labor according to the US dept of Labor

• security guards – 1,032,000 - 62 percentsecurity guards – 1,032,000 - 62 percent

• police officers – 625,880 – 38 percent police officers – 625,880 – 38 percent