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Government Spending and Taxation

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Government Spending and Taxation

Joseph La France

Grantham University

Government Spending and Taxation

In this paper I will attempt to apply 4 of the 8 guideposts to government spending and taxation. I will begin these applications with “tradeoffs”. A good example of the government “tradingoff” something I believe would be in the way Social Security works. Taxes are pulled out of people’s paychecks to put toward retirement or “Social Security”. With over expenditures in other areas of spending through the government they pulled money from the social security funds to compensate. Thus causing a lack of funds in the social security department and causing them to come up with a way to compensate. If my understanding is correct on the matter, they now pull social security from younger workers, to pay to the retirees. Therefor trading off the debt from the retiree, to the worker that will one day retire himself.

In appliance of economizing, the government for the first 125 years spent only what was needed federally, on 4 main aspects: Income Transfers, Health Care, National Defense, Net interest. Thus providing funds for things that anyone can use and benefit from. Income transfers being like Social Security. Health Care being medical plans and or insurance. National Defense, like funding the US Army and Navy. And Net interest being the national debt.

Incentives are a huge benefactor in dealing with the government. As many would say these days the government is so corrupt, thus for people to want to do anything with the government they require incentives. One incentive that the government has put into place would be the Earned Income Credit. Both the standard deduction and personal exemption have been increased substantially during the last couple of decades.

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