3.6 How State and Local Governments Raise Revenue

3.6 How State and Local Governments Raise Revenue

Taxes in North Carolina

Multiple Choice

Tommy dropped out of school because of the trouble he was having with the law. When Tommy reenrolls in a school for "at risk" kids which is funded by public money, but it is independent of the local school district. Which school is Tommy probably attending?

• a private school

• a traditional public school

• an annexed school

• a charter school

Questions?

Work, Schedules, Laptops?

Open Ended

How does the federal government raise revenue?

Overview

• finances - money $

• NC Constitution requires the state to maintain a balanced budget - revenue and responsible spending

Open Ended

What is responsible spending?

Poll

What form of revenue do you brings in the most money $ for the state?

• Property taxes

• Corporate/Business Taxes

• Income Taxes

• Sales Taxes

Taxes

• Income tax - primary method of revenue just like fed. gov.

• 5.25% flat income tax rate

• has decreased over last decade to increase take home pay and attract workers

Multiple Choice

How much do you pay in NC for your income tax?

• 5.75%

• 6.25%

• 9.75%

• 5.25%

Taxes

• Corporate income tax - % of yearly profits

• 2.5% Corporate tax rate - lower rate draws more businesses

• Where do you think businesses are moving from?

Property Taxes

• Property taxes applies to certain types of property like land, home, or car

• Usually imposed by a county or municipality

• Determined by assessments

• more you own, more you pay

Poll

Who issues property taxes for you?

• State

• County you live in

• City you live in

Taxes

• Inheritance tax - taxes which must be paid when you inherit an item before you inherit it ex. house, money, or car

• similar to estate tax

• Estate tax - tax on everything a person owns when they die

• Neither is in effect in NC

Multiple Choice

Do estate taxes remain the same or do they fluctuate?

• Remain the same

• Fluctuate

Taxes

• Sales tax - tax on goods and services

• tax = % of price, more expensive = more $ you pay

• Excise taxes - taxes on specific non-essential goods like cigarettes

Multiple Choice

How will our school system pay for the $300 million bond to improve schools?

• Estate tax

• Sales tax

• Corporate tax

• Income tax

Fees

• another way state raises money

• fees for fishing, driver's license. etc.

• User fees - use of public facilities

• Disposal fees - paid to state or local government for

• Impact Fees - developers pay for disturbing land and wildlife

Fines

• money paid as a punishment for crime or civil offense

• also provide money for state and local governments

Poll

Would a speeding ticket be a fine or a fee?

• Fine

• Fee

Other Means of Revenue

• State and Municipal Bonds - issue bonds in exchange for cash

• Government body which issues the bond then pays the bond holder back with interest

• States and cities benefit as revenue increases while for the purchaser it works as an investment

Other Forms of Revenue

• Intergovernmental revenue - money received from federal, state, and local governments in the form of a grant, shared revenue, and special payments

• state governments often receive federal grants in aid for roads and Medicaid

• way federal government can influence state policy such as raising the drinking age to 21

Multiple Choice

Which source of revenue for the state is also an investment for the local citizen?

• Estate tax

• State and Municipal Bonds

• User Fees

• Property taxes

Multiple Choice

What would COVID assistance to our school be considered?

• State and Municipal Bonds

• Intergovernmental Revenue

• Sales Tax

• User Fees

Open Ended

Name three methods by which state and local governments raise revenue and define each method.