Splash Screen Chapter 9 Sources of Government Revenue.

Chapter 9Sources of

Government Revenue

2

Key Terms

– incidence of a tax – tax loophole – individual income tax – sales tax – benefit principle of

taxation – ability-to-pay principle of

taxation

– sin tax

Study Guide (cont.)

Click the mouse button or press the Space Bar to display the information. Section 1 begins on page 223 of your textbook.

– proportional tax – average tax rate – progressive tax – marginal tax rate – regressive tax

3

ObjectivesAfter studying this section, you will be able to:

Applying Economic ConceptsEquity What role does equity, or fairness, play in administering taxes?

Study Guide (cont.)

– Explain the economic impact of taxes. – List three criteria for effective taxes. – Understand the two primary principles of

taxation. – Understand how taxes are classified.

Click the Speaker button to listen to the Cover

Story.


4Click the mouse button or press the Space Bar

to display the information.

Introduction

• An enormous amount of money is required to run the federal, state, and local governments of the United States.

• Whether we count the dollars, or the days needed to earn the dollars, it all adds up to a staggering sum.

• In 2003, all three levels of government collected approximately $3 trillion—or about $10,300 for every man, woman, and child in the United States.



Introduction (cont.)

• Total revenue collections by all levels of government have grown dramatically over the years.

• Even when adjusted for inflation and population growth, these revenues increased by nearly 800 percent since 1940.



Economic Impact of Taxes• Taxes affect the factors of production

and, therefore, resource allocation. • A tax placed on a good at the factory raises

production costs (supply curve shifts to the left); if demand stays the same, the equilibrium price goes up.

• Taxes affect the economy by encouraging or discouraging certain activities.

• A sin tax is a high-percentage tax that raises revenue while reducing consumption of a socially undesirable product.



Economic Impact of Taxes

• Taxes affect productivity and economic growth by changing the incentives to save, invest, and work.

• The incidence of a tax is the final burden of the tax: it is easier for a producer to shift the incidence of a tax to the consumer if the demand is inelastic; the more elastic the demand, the more likely the producer will absorb a greater portion of the tax.



Criteria for Effective Taxes

• Criterion 1: equity or fairness; fairness is subjective, but taxes are considered fairer if they have fewer loopholes—exceptions, deductions, and exemptions.

• Taxes are effective when they are equitable, simple, and efficient.

• Criterion 2: simplicity; tax laws should be easy to understand.

• Criterion 3: efficiency, which means it is easy to administer and is successful at generating revenue.



Two Principles of Taxation• The benefit principle states that those

who benefit from government goods and services should pay in proportion to the amount of benefits they receive.

• The limitations of this principle are that many government services provide the greatest benefit to those who can least afford them and that benefits are hard to measure.



Two Principles of Taxation (cont.)

• The ability-to-pay principle is the belief that people should be taxed according to their ability to pay, regardless of the benefits they receive.

• The ability-to-pay principle is based on two ideas: that societies cannot always measure the benefits derived from government spending, and that people with higher incomes suffer less discomfort in paying taxes than people with lower incomes.



Types of Taxes• A proportional tax is one that imposes the

same percentage on everyone, regardless of income.

• A progressive tax is one that imposes a higher percentage of tax on persons with higher income.

• A regressive tax is one that imposes a higher percentage on low incomes than on high incomes.



Types of Taxes

Figure 9.3

13

Discussion Question

What benefits does the government enjoy in having a progressive income tax?

As Americans become more successful and earn higher incomes, the government’s revenue increases—for example, stock market dividends are taxable, leading to higher government collections.

Click the mouse button or press the Space Bar to display the answer.

14

Section Assessment (cont.)

Explain the characteristics of proportional, progressive, and regressive taxes.

proportional: impose same percentage rate of taxation on everyone

progressive: impose higher percentage rate on persons with higher incomes

regressive: impose a higher percentage rate on lower incomes as compared to high incomes


15


Drawing Inferences Think about the last tax you paid. Using the criteria for progressive, proportional, and regressive taxes, determine which type of tax you think it is and explain why.

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19Click the mouse button or press the Space Bar to display the information. Section 2 begins on page 231 of your textbook.

Key Terms

– Internal Revenue Service (IRS)

– tax return – indexing – FICA – medicare – payroll tax

– payroll withholding system

Study Guide (cont.)

– corporate income tax

– excise tax – luxury good – estate tax – gift tax – customs duty – user fee

20

Click the Speaker button to listen to the Cover Story.



Applying Economic ConceptsFederal Taxes You, the American taxpayer, are the source of most of the money the government spends. Almost all federal government revenue comes from taxation.

Study Guide (cont.)

– Explain the progressive nature of the individual income tax.

– Describe the importance of the corporate tax structure.

– Identify other major sources of federal revenue.



Introduction• The federal government collects taxes from

a number of sources.

• The most important sources of government revenue are individual income taxes, Social Security taxes, and corporate income taxes.



Individual Income Taxes• The Federal government collects about 48

percent of its revenue from the individual income tax.

• Taxes are typically withheld from individual’s paychecks, with employers sending the taxes directly to the Internal Revenue Service.



• Individuals file a tax return on or before April 15 each year; if taxes withheld are more than the taxes owed, the individual receives a refund; if not, the individual makes a payment of the tax balance.

Individual Income Taxes (cont.)

Figure9.4

24

Individual Income Taxes (cont.) • The individual income tax is a progressive

tax because individuals earning higher incomes pay higher tax rates.

Figure 9.5



FICA Taxes

• The Federal Insurance Contributions Act (FICA) tax pays for Social Security and medicare.

• FICA it is the second largest source of government revenue.

• The FICA tax is a regressive tax. Social Security is partly a proportional tax and partly a regressive tax because it is 6.2 % (proportional) until $106,800 then it stops (regressive) so rich seem to not have as much of their income taxed.

26

Discussion Question

Why do you suppose customs duties are no longer a large source of government revenue?

Answers will vary but the students may indicate that the United States government encourages international trade and heavy customs duties would discourage such trade.




Corporate Income Taxes• Corporations pay a tax on their profits

because they are considered legal entities. They appear before government as an individual with rights and are therefore eligible for taxing.

• Corporations tax is the third largest source of government revenue.

28

Other Federal Taxes• The excise tax is a regressive tax on the

manufacture or sale of selected items. .

Again, because it appears to be a proportional tax does not mean that it is not a regressive tax. Lower incomes spend more on excise taxes. Such as gasoline and liquor.

• The estate tax deals with the transfer of property when a person dies (estate must be over 3,500,000.00 to be taxed)

• The gift tax is places on large donations of money or wealth and is paid by the donator.

Click the mouse button or press the Space Bar to display the information.

29

Other Federal Taxes (cont.)

• A customs duty is a charge levied on goods brought in from other countries.

• The Reagan administration implemented user fees for the use of goods or services.

• User fees are an example of taxation based on the benefit principle.

30

USER TAX

31


Describe the progressive nature of the individual income tax.

It imposes a higher percentage rate of taxation on persons with higher incomes.




• State and local governments, like the federal government, raise revenue in many ways.

• They receive funds from sales taxes, property taxes, utility revenues, and through other methods.

• Sometimes, they even tax us when we die.



Did You Know?

• Ohio ranks fourth in the nation for lottery ticket sales and revenues, after New York, Texas, and Massachusetts. In 1998 it reported total expenses and payments of $2,192,761,403. Since the lottery started in 1974, it has contributed $9 billion to the state’s public educational system.

• In fiscal year 2011-2012, the Florida Lottery transferred more than $1.31 billion to the Educational Enhancement TrustFund.



State Government Revenue Sources

Figure 9.7



• Intergovernmental revenue are funds collected by one level of government that are distributed to another level.

State Government Revenue Sources

• Intergovernmental revenues are the largest source of revenues for state and local governments—about one-fourth of all state revenues. IT’S WHERE WE GET THE MONEY TO RUN THE SCHOOL SYSTEM. FEDERAL FUNDS TRANSFERRED TO LOCAL SCHOOL SYSTEMS.

• A sales tax is one levied on consumer purchases for nearly all products.



State Government Revenue Sources• • Individual income tax revenues

• Other sources of revenue include interest earnings on surplus funds; fees from state-owned colleges, universities, and schools; corporate income taxes, and hospital fees.

37

Discussion Question

Why is the sales tax an easy way for states to collect from consumers?

The tax is collected by the seller from the buyer at the site of the purchase, and the seller sends the funds into the government on a regular basis.




Local Government Revenue Sources• Intergovernmental revenues are generally

earmarked for education and public welfare; they make up the largest source of local government revenue.

• Property taxes are levied on tangible and intangible products; they make up the second largest source.

• Local governments receive revenues from government-owned public utilities and state-owned liquor stores.



Local Government Revenue Sources (cont.)

• Some towns and cities have a sales tax, which is collected along with the state’s sales tax.

• Other sources of local income include hospital fees, personal taxes, and public lotteries.

40



Explain the four major sources of state tax revenues.

The four major sources of state tax revenues are sales tax, intergovernmental revenues, individual income taxes, employee retirement contributions, and assessments levied on state employees.

41



Explain the difference between state and local revenue systems.

state: collect from intergovernmental revenues, sales taxes, employee retirement contributions, and individual income taxes

local: collect from intergovernmental revenues, property taxes, public utilities and state liquor store sales, and sales taxes

42



List the major types of state, local, and federal taxes reflected on a paycheck.

Federal income tax, state income tax, city income tax, and FICA are reflected on a paycheck.

BEGIN TAKING

NOTES HERE FOR

SECTION 3

45

Click the Speaker button to listen to the Cover Story.



Applying Economic ConceptsFlat Tax Have you ever noticed how much time your parents spend filling out their income tax returns? What would a flat tax mean to them?

Study Guide (cont.)

– Describe the major tax reforms since 1980. – Debate the advantages and disadvantages of

the value-added tax. – Explain the features of a flat tax. – Discuss why future tax reforms will occur.

46Click the mouse button or press the Space Bar to display the information. Section 4 begins on page 244 of your textbook.

Study GuideMain Idea

The consequence of tax reform was to make the individual tax code more complex than ever.

Reading StrategyGraphic Organizer As you read the section, complete a graphic organizer like the one on page 244 of your textbook by listing the advantages and the disadvantages of the flat tax. Include a definition of flat tax in your own words.

47

Introduction• The complexity of our tax code is not

accidental: it is the result of adjustments and amendments by Congress to both influence and reward behavior.



Examining Your Paycheck

• Looking at your payroll withholding statement will help you identify many of your state and local government’s revenue sources.

• Additional deductions can be added to payroll for retirement contributions, purchases savings bonds, or credit unions.

49

Examining Your Paycheck (cont.)

Figure 9.9



Tax Reform

• The Economic Recovery Act of 1981 reduced taxes for individuals and businesses.

• By the mid-1980s, Americans believed the tax code favored the rich and powerful.

• In 1986 Congressional tax reform limited the tax brackets to 15 percent and 28 percent.



Tax Reform (cont.)

• The Omnibus Budget Reconciliation Act of 1993 added two higher income tax brackets but its goal was more to assist in balancing the federal budget than in adjusting rates for income levels.

• By 1997 the government had high tax revenues, so the Taxpayer Relief Act was passed giving tax credits for children and educational expenses, and reduced rates to people with capital gains from long-term investments in stocks and bonds.

52

The Flat Tax• A flat tax is a proportional tax on individual

income after a specified threshold has been reached.

• Advantages of the flat tax: it would be simple to report; it would close or minimize tax loopholes; it reduces the need for tax accountants and much of the IRS; it could lead to savings of up to $100 billion.

• Disadvantages of the flat tax: it removes the behavior incentive in the tax code; it benefits those with high incomes; it shifts tax policy away from the ability-to-pay principle.




The Inevitability of Future Reforms• The complex tax code guarantees future

attempts to simplify it.

• Unexpected economic slowdowns, such as the 2001 recession, can cause tax revenues to fall and budget deficits.

• Unexpected political events may require unplanned expenditures, such as Congress voting to spend $40 billion to rebuild New York City and the air traffic system after September 11, 2001.



The Inevitability of Future Reforms• Tax reform is likely to continue because

each political administration abruptly changes policies to suit its agenda.

• Politicians are reluctant to give up the power they have in adjusting the current complex system.

55

Section 1: The Economics of Taxation


• Taxes affect the allocation of resources, behavior, and economic growth.

• The incidence of a tax, or final burden of a tax, is affected by elasticity–when demand for a product is elastic, less of the tax can be shifted to the buyer; more can be shifted when demand is inelastic.

• Equity, simplicity, and efficiency are the criteria used to judge the effectiveness of a tax.



Section 1: The Economics of Taxation (cont.)

• Two principles, the benefit principle of taxation and the ability-to-pay principle of taxation, have been used to help select the group or groups that bear the burden of the tax. Both involve value judgments, and both types of taxes are widely used today.

• Taxes can be placed into three groups– proportional taxes, progressive taxes, and regressive taxes–depending on the way in which the tax burden changes as income changes.



Section 2: The Federal Tax System

• The main source of revenue for the federal government is the individual income tax.

• Indexing is used to change the marginal tax rates to offset the effects of inflation.

• The second largest revenue source is the FICA tax, collected to cover Social Security and medicare.

• The corporate income tax is the third largest source of federal revenue.

• Other sources of federal revenue include excise taxes, gift taxes, customs duties, and user fees, which is a different name for a benefit tax.



Section 3: State and Local Tax Systems

• Intergovernmental revenues are the largest source of state revenues.

• Local governments receive intergovernmental revenues from state and federal governments. Local governments also raise revenue from property taxes, utility and liquor store sales, sales taxes, and other sources.

• The payroll withholding statement attached to a person’s weekly, biweekly, or monthly paycheck provides a summary of wages, taxes, and other withholdings.



Section 4: Current Tax Issues

• A value added tax (VAT) is a tax on consumption rather than income. It is built into a product’s every stage of production, is largely invisible, is regressive, and can raise huge sums.

• The Economic Recovery Tax Act of 1981 lowered marginal tax rates for all levels of income, and added accelerated depreciation and the investment tax credit for businesses.

• The 1986 tax reform law closed tax loopholes opened in 1981, and reduced the individual income tax code to two brackets, making it more proportional.



Section 4: Current Tax Issues (cont.)

• The Budget Deficit Reduction Act of 1993 added two marginal tax brackets, restoring the progressive nature of the tax removed in 1986.

• The Taxpayer Relief Act of 1997 provided the wealthy with long-term investment tax breaks, and provided modest tax relief for individuals with child and educational expenses.

• President Bush’s 2001 tax plan is designed to cut taxes $1.35 billion over ten years.

• A flat tax is a proportional tax on individual income after a specified threshold has been reached.

62

___ annual adjustment of tax brackets to keep pace with inflation

___ average tax per dollar decreases as taxable income increases

___ average tax per dollar increases as taxable income increases

Click the mouse button or press the Space Bar to display the answer. The Chapter Assessment is on pages 252–253.

Identifying Key TermsMatch the letter of the term best described by each statement.

F

J

H

A. ability-to-pay H. progressive taxB. corporate income tax I. proportional taxC. estate tax J. regressive taxD. excise tax K. sales taxE. FICA L. sin taxF. indexing M. VATG. individual income tax


to display the answer.

Identifying Key Terms (cont.)

Match the letter of the term best described by each statement.

___ average tax per dollar unchanged as taxable income rises

___ designed to discourage consumption of socially undesirable goods or services

___ tax on the manufacture or sale of certain items

I

L

D







___ largest source of revenue for the federal government

___ large source of revenue for state governments

___ national sales tax on value added at each stage of production

G

K

M






___ Social Security and medicare taxes

___ tax on the transfer of property when a person dies

___ tax paid by those who can most afford to pay

___ third largest source of income for the federal government

E

C

A

B



Describe how taxes can be used to affect people’s behavior.

A heavy tax can be imposed on a product to limit consumption of that product.

Reviewing the Facts



Illustrate, using supply and demand curves, how the burden of a tax can be shifted.

Answers will vary.

Reviewing the Facts (cont.)




Explain the three criteria used to evaluate taxes.

equity–taxes should be just and impartial; simplicity–tax laws should be easily understood; efficiency– taxes should be relatively easy to administer




Name the two principles of taxation.

benefit principle, ability-to-pay principle




Describe the main features of the individual income tax.

It is a progressive tax on people’s earnings, collected through payroll withholding system and sent directly to the government.




Identify the two components of FICA.

Social Security taxes, medicare




Describe the corporate income tax.

the tax a corporation pays on its profits




Distinguish between excise taxes, estate and gift taxes, and customs duties.

excise taxes–taxes on manufacture or sale of certain items; estate taxes– levied on transfer of property when a person dies; gift taxes–levied on donations of money or wealth; customs duties–levied on goods brought in from other countries




Identify the main sources of revenue for state governments.

sales taxes, intergovernmental revenues, individual income taxes, employee retirement contributions




List the main sources of revenue for local governments.

intergovernmental revenues, property taxes, utilities and liquor stores, sales taxes




Identify the main types of taxes that are normally withheld from a worker’s paycheck.

federal income tax, state income tax, city income tax, FICA taxes




Describe the five major tax reform bills enacted since 1980.

Economic Recovery Tax Act of 1981, tax reform law of 1986, Omnibus Budget Reconciliation Act of 1993, Taxpayer Relief Act of 1997, and 2001 tax reform




List the advantages and disadvantages of a VAT.

adv: hard to avoid, incidence of tax widely spread, not visible to consumer, easy to collect, small tax can raise large revenue; disadv: invisible to consumers, might compete with state sales taxes




Identify the income group that will receive the most benefit under a flat tax.

individuals with high incomes




Explain why future tax reforms are inevitable.

because of the complexity of the tax code, the record tax collections in the 1990s, the abruptness of political changes



Thinking Critically

Synthesizing Information If you were an elected official who wanted to increase tax revenues, which of the following taxes would you prefer to use: individual income, sales, property, corporate income, user fees, VAT, or flat? Provide reasons for your decision.

Answers will vary.



Thinking Critically (cont.)

Making Comparisons Distinguish between the benefit and the ability-to-pay principles of taxation. Use a web like the one on page 253 of your textbook to help you organize your answer.

Answers will vary.



Applying Economic Skills

User Fees In your own words, prepare the rationale for a user fee that you think should be enacted.

user fee’s burden on the individual



Applying Economic Skills (cont.)

Sales Taxes Some people object to state and local governments imposing sales and property taxes. What would you say to these people in defense of the two taxes?The sales tax is relatively cheap to administer and raises huge amounts of revenue; many public services enable people to maintain and improve their property value, so property should be subjected.



Applying Economic Skills (cont.)

Flat Taxes Evaluate the concept of a flat income tax using the three criteria for effective taxes. Write a brief summary of your support or opposition to such a proposal.

A flat tax is a proportional tax on individual income after a specified threshold has been reached; answers should consider equity, simplicity, and efficiency of a flat tax.

86

The government decides to fight air pollution by cutting back on the amount of gasoline used in the country. A one-dollar-per-gallon tax is to be imposed on gasoline. Should this tax be placed on the oil companies or on the consumers? Explain.


87

Placing the tax on consumers has the best chance of reducing gasoline use. Producers could absorb some of the cost of the tax in order to keep sales up.


Continued on next slide.

Create a television-viewing log for news items concerning government and the economy–with specific reference to taxation. Record the date, the subject of the item, and the length of time given to the item. When study of the chapter is completed, compare and discuss your logs with the class.

Explore online information about the topics introduced in this chapter.

Click on the Connect button to launch your browser and go to the Economics: Principles and Practices Web site. At this site, you will find interactive activities, current events information, and Web sites correlated with the chapters and units in the textbook. When you finish exploring, exit the browser program to return to this presentation. If you experience difficulty connecting to the Web site, manually launch your Web browser and go to http://epp.glencoe.com/sec/socialstudies/economics/econprinciples2005.index.php

http://www.glencoe.com/sec/socialstudies/economics/econprinciples2005/index.php

Explore online information about the topics introduced in this chapter.

Click on the Connect button to launch your browser and go to the BusinessWeek Web site. At this site, you will find up-to-date information dealing with all aspects of economics. When you finish exploring, exit the browser program to return to this presentation. If you experience difficulty connecting to the Web site, manually launch your Web browser and go to http://www.businessweek.com

http://www.businessweek.com/

Taxable Income Taxable income is the amount of income that is subject to taxation by the state and federal government. It is the adjusted gross income of wages, salaries, dividends, interest, capital gains, etc., less allowable adjustments deductions, which include but are not limited to contributions to retirement accounts, business expenses, and capital losses.

Taxes Around the World If each student were to ask 10 people the question, “Do you pay too much in taxes?” the vast majority of responses would be in the affirmative. A recent study suggests, however, that Americans are among the least taxed people in the industrialized world. In the United States all taxes account for about 30 percent of gross domestic product (GDP). Of the world's 24 wealthiest nations, only Turkey and Australia collect a smaller percentage of GDP in taxes. Most leading industrialized nations pay close to 40 percent. The study concluded that taxes in the United States could be raised substantially and the country would still remain among the least taxed nations.

High Taxes? Are You Sure?

Canadian Tax System

Click on a hyperlink to choose that topic.

High Taxes? Are You Sure? Individual income taxes are the main source of revenue for the Canadian government. Rates in Canada’s progressive individual income tax system range from 6 percent to 34 percent. Another major source of revenue is the corporate income tax. Canadian corporations are supposed to pay 46 percent of their income in taxes but as a result of deferments and credits, seldom pay the full amount.

Canadian Tax System The federal government of Canada collects a federal income tax as well as provincial income taxes for nine of its provinces. The provincial income tax from each province equals a percentage of its federal income tax. Only Quebec collects its own taxes according to its own rates.

The effect of a tax depends on the elasticities of the demand and supply curves.

Taxpayers send their income tax returns to one of the IRS’s 10 tax-processing centers. These centers receive and process around 200 million returns and other related documents each year. Using computers, IRS staff members quickly check each return. A small percentage of each year’s returns are selected for audit–a more thorough examination. The IRS also investigates suspected violations of the tax laws.

Electronic Tax Forms Income-tax payers who once picked up tax forms at the library or the local accountant’s office can now stay home and order a Federal Tax Products CD-ROM on the Internet. The CD contains current year tax forms, including forms that may be filled in and filed electronically.

Charitable Web Sites Suppose the flat tax on income becomes a reality? Will more people go hungry if taxpayers can no longer deduct charitable contributions? Not if Web sites such as the Hunger Site catch on. For each click, the United Nations World Food Program receives three cups of rice, maize, or other staples. The user pays nothing. A corporate sponsor pays for the food in exchange for the opportunity to flash its logo on the screen after each donation.


In 1913, one compilation of federal tax rules and regulations was 400 pages long. Today—with commentaries, interpretations, and many court cases—it weighs in at a staggering 54,846 pages: 16 feet of solid paper! Does this complexity allow corporations to pay less in taxes today than they did in the past?

Read the BusinessWeek Newsclip article on page 243 of your textbook.

The Corporate Tax Game

This feature is found on page 243 of your textbook. Click the Speaker button to listen to an audio introduction.


Drawing Conclusions How does Marriott benefit from investing in coal treatment machinery?

By using credits to reduce its tax liability.

Click the mouse button or press the Space Bar to display the answer. This feature is found on page 243 of your textbook.



Analyzing Information Why do few corporations pay the 35% tax rate mandated by the federal government?

Because they are able to take advantage of favorable tax rules and regulations.


• Define budget deficit, surplus, and balanced budget.

• Describe how the government finances budget deficits.

• Outline the different points of view on the 1999 budget agreement.

After viewing How the Government Spends, Collects, and Owes, you should be able to:

Economics and YouVideo 15: How the Government

Spends, Collects, and Owes



Side 2Disc 1

Chapter 15

Click the Videodisc button anytime throughout this section to play the complete video if you have a videodisc player attached to your computer.

Click the Forward button to view the discussion questions and other related slides.




Click inside the box to play the preview.

Side 2Disc 1

Chapter 15




What is the difference between a budget deficit and a budget surplus?

In a budget deficit, the federal government spends more in a year than it receives in revenue and taxes. In a budget surplus, the government takes in more money than it spends.


Your teacher has assigned a major research report, so you go to the library. As you wander the aisles surrounded by books, you wonder: Where do I start my research? Which reference works should I use?

This feature is found on page 230 of your textbook.

Using Library Resources


Learning the Skill


• Libraries contain many resources. Here are brief descriptions of important ones:

• Reference Books Reference books include encyclopedias, biographical dictionaries, atlases, and almanacs.

Click the mouse button or press the Space Bar to display the information. This feature is found on page 230 of your textbook.

– An encyclopedia is a set of books containing short articles on many subjects arranged alphabetically.


Learning the Skill (cont.)


– A biographical dictionary includes brief biographies listed alphabetically by last names.

– An atlas is a collection of maps and charts for locating geographic features and places. An atlas can be general or thematic.

– An almanac is an annually updated reference that provides current statistics and historical information on a wide range of subjects.





• Card Catalogs Every library has a card catalog, either on cards or computer or both, which lists every book in the library. Search for books by author, subject, or title. Computerized card catalogs will also advise you on the book’s availability.

• Periodical Guides A periodical guide is a set of books listing topics covered in magazines and newspaper articles.





• Computer Databases Computer databases provide collections of information organized for rapid search and retrieval. For example, many libraries carry reference materials on CD-ROM.

• Internet Libraries can often suggest clearinghouse sites, online databases, and other reputable sites.



Practicing the Skill


• Suppose you are assigned a research report dealing with the introduction of the U.S. income tax. Read the questions on the following slides, then decide which of the sources described above you would use to answer each question and why.





almanac

During which year was the federal income tax established?



encyclopedia

What was the purpose of the income tax when it was introduced in 1913?




encyclopedia or card catalog

How did the public react to the tax?



Janet Yellon 1946–

Alice Rivlin 1931–

Click a picture to learn more about Janet Yellon or Alice Rivlin. Be prepared to answer the questions that appear on the next two slides.

Making Comparisons Compare and contrast the work and views of Yellen and Rivlin.

Similarities: Both economist lead important federal economic agencies, both are critical to federal deficit spending, and both focus on macro-economic issues. Differences: Yellen’s top priority is balancing the federal budget, and Rivlin is a strong critic of the budget.




Synthesizing Information What significance is there in the fact that both Yellen and Rivlin are women?

Their success belies discriminatory attitudes.

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Splash Screen Chapter 9 Sources of Government Revenue.

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