The Federal Budget Analysis

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Many people believe that the government has an obligation to take care of its citizens and provide them with the various goods, programs, services, opportunities, and safety for an enjoyable life. Although some may disagree, we should consider ourselves fortunate to have many of those privileges granted to us by our government. However, by now, you should know that nothing in this world is free; the US government has to spend billions and billions of dollars annually on programs for its citizens. Every year the government sets the amount of money it’s going to spend on these programs, called the federal budget. For the Fiscal Year 2015, the federal budget is $3.7 trillion dollars. Yet, the US government only about has $3.2 trillion dollars …show more content…

However, there is an indirect form of spending that also affects the US deficits in a negative way. Tax breaks are basically tax reductions for citizens written into the federal tax code to promote certain activities that they believe are beneficial to the public good of society in order to boost the economy. For example, they may give special low rates on capital gains or a deduction for mortgage interest rates. These tax breaks means that the government chooses to receive less tax revenue which means less money in the US Treasury, and are expected to cost the federal government $1.22 trillion in 2015. That’s more than all discretionary spending in the same …show more content…

One interesting characteristic of the federal revenue is that large corporations actually contribute less money to the budget than individuals. Reason being, that the wages and salaries of all Americans accumulated is much larger than profits of US corporations. Another reason for this is that many corporations exploit loopholes in the tax code to avoid liability. Most corporations should pay a 35% tax rate, yet many corporations pay a much lower percent of their profit in taxes. One common example of a loophole is when multinational corporations divide their profits to their overseas operations. This has led to much controversy in the US because many people believe that these companies that exploit these loopholes have an obligation to taxes to the US, especially during difficult economic times where the nation really needs the

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