Money Matters Study Resources

Teacher’s Guide Money Matters Time Needed: One class period Materials Needed: Student worksheets Copy Instructions: Reading, Guided Notes and Extension pages (class set; single-sided) Processing Activity Pate (class set; double-sided) Learning Objectives. Students will be able to:  define the following key terms: mandatory, discretionary, revenue, surplus, and deficit.  identify types of taxes and the purposes for which taxes are used.  analyze the decisions made when trying to balance a nation’s budget. STEP BY STEP  ANTICIPATE the lesson by asking the following question: “What are needs and how are they different from wants?” IF USING THE POWERPOINT PRESENTATION  DISTRIBUTE the Money Matters Guided Notes.  RUN the Money Matters PowerPoint presentation using the built in questions as an opportunity for class review and as a check for understanding. Guide students through the notes, using the teacher’s guide as a reference. IF USING THE PAPER-BASED OPTION  DISTRIBUTE the Money Matters Reading and Money Matters Guided Notes.  READ through the Money Matters Reading as a class, stopping to review and check for understanding.  INSTRUCT students to complete the Money Matters Guided Notes page, individually, in pairs, or as a whole class activity.  DISTRIBUTE the Money Matters Processing Activity (2 pages).  REVIEW instructions for the Processing Activity and instruct students to complete the activities.  DISTRIBUTE the Money Matters Extension Activity and allow students to finish as there is time. Money Matters Name: When the government needs more money, it can’t just start printing hundred dollar bills. The government’s money has to come from somewhere… like TAXES! Most people don’t like paying taxes, but without taxes our government would run out of money to fund the military, help the needy, build roads, and provide important services! There are several types of taxes that the government uses to raise revenue. Revenue is the money collected by the government. It’s like the government’s income. U.S. Government Revenue Sources: x e Ta m o c In on ased b s i tax f This entage o . rc a pe ou make y t wha ore you er m high The e h t , make Social Security Corporate Income Ta x This tax is taken to provide retired Just like the people with personal inc ome income they need. tax , corporatio ns in 2010 it was must pay in come 6.2% of your total tax es, too! income! Othe Excise Tax r Tax es T a s xes a l These are taxe s o incl estate taxes ude paid on certain hol, (when so goods like alco meon dies) e a s, te n et ar d g ci tariffs o n g . as oods jewelry, and g bro from other ught count ries. Other Taxes Income Taxes $81,000,000,000 $1,061,000,000,000 Excise Taxes Social Security $77,000,000,000 Corporate Income Taxes $940,000,000,000 What was the total revenue earned by the U.S. government is 2010? $222,000,000,000 With all that money and all the projects in the country to think about, there is only one thing that can help keep it all straight… THE FEDERAL BUDGET! Budgets are plans for receiving and spending money. The federal budget is the U.S. government’s plan to raise revenue and spend money. The goal is for the President and Congress to compromise to create a budget for the country. There are many things the government spends money on that they have to try and balance. The biggest areas of spending are defense—$722 billion in 2010—and benefits for people who have retired—$724 billion for Social Security and $462 billion for Medicare in 2010. Providing health care and financial support for needy citizens is another high priority for the U.S. government. Other categories of spending include education, transportation, science, development, and the environment. The total estimated budget for 2010 was $3,600,000,000,000! After the President and the Congress have created the federal budget, there are two possible outcomes. If the government has spent less money than it raised in revenue, then the revenue left over is called a surplus. If the government has spent more money than it raised in revenue, there is a deficit and the government must borrow money to make up the difference. Surplus Deficit Reading p.1 Money Matters Name: Where Federal Money Comes From When the government needs more money it simply prints more bills! TRUE or FALSE The money raised by the government in taxes is called _________________________________. Define each tax: Social Security Excise Complete the table: Income Other Taxes Corporate Type of Tax 4 5 How Much Money 3 11 1 2 2 3 4 5 2010 Federal Revenue With all the revenue and spending projects, there is only one thing that can keep it all straight… The ______________________________________________ Define: Budget: Federal Budget: Circle the area of spending that received the MOST funding in 2010. Put a star next to the area of spending that you think should receive the most funding: Education Defense Social Security Income Security Health Transportation Energy Medicare Science Environment Write the 2010 total estimated spending in long form and the way you would say it: Identify and define: Two Possible Outcomes In 2010, was there a SURPLUS or a DEFICIT? ________________________________ Guided Notes Money Matters Name: Cooperville’s Budget for 2011 Cooperville is a country on a far away continent. Its president is in charge of designing the whole budget. She and her advisors are just sitting down to plan their budget for the year 2011 and they need some help organizing and reading the information that they have in front of them. You’ve been called in to help sort out their budgeting mess. These are the facts:  Cooperville is earning $570,000,000,000 in income taxes.  Cooperville is spending $4,303,000,000 on defense.  Cooperville is spending $6,457,000,000 on healthcare.  Cooperville is earning $10,000,000,000 in excise taxes.  Cooperville is spending $500,000,000,000 on social security.  Cooperville is spending $3,000,000,000 on education.  Cooperville is spending $5,430,000,000 on agriculture.  Cooperville is earning $135,000,000,000 in social security.  Cooperville is spending $220,000,000,000 on smaller projects. Complete the following chart, listing revenues and expenses from GREATEST to LEAST: Revenue Type Revenue Income Taxes $570,000,000,000 Expense Type Expense Social Security $500,000,000,000 TOTAL EXPENSES TOTAL REVENUE Calculate. Answer the questions below to see where Cooperville’s budget stands. 1)Which figure is higher?  Revenue  Expenses 2)Find the difference between total revenues and expenses in Cooperville. Show your math here. 3)Is this difference a surplus or a deficit?  Surplus  Deficit 4) How do you know? A. The expenses are higher than the revenue B. The revenue is higher than the expenses 5) What are the two possible ways Cooperville could balance its budget? Increase ________________________ - OR - Decrease ______________________________ Processing Activity p.1 a. Money Matters Name: Balance the Budget People hate taxes! But they are the main way governments raise revenue. Revenue pays for services that people expect—and sometimes need. If you were going to raise taxes, which ones would you raise? If you were going to cut services, which ones would you cut? Fill out the charts below to show what you would do. Tax Income Tax Excise Tax Social Security Spending Program Your Action     Cut Lower Keep the same Raise     Cut Lower Keep the same Raise     Cut Lower Keep the same Raise Your Action Why? If you cut the tax, what services would you cut to reduce expenses? Why? If you would spend more, which taxes would you raise to pay for it?  Cut  Keep  Spend More  Cut  Keep  Spend More  Cut  Keep  Spend More  Cut  Keep  Spend More  Cut  Keep  Spend More Processing Activity p.2 a. Money Matters Name: Facts and Figures. Use the chart below to answer the following questions. 1. An alternate title for this chart might be A. Amount of Yearly Spending in Billions of Dollars B. Annual Deficit in Billions of Dollars 2. Label the lines above and below the x-axis with the terms SURPLUS and DEFICIT. HINT: A DEFICIT means spending MORE than your budget 3. Complete the blanks in following table: Year Budget Outcome 1980  Surplus  Deficit 1985  Surplus  Deficit 1990  Surplus  Deficit 1995  Surplus  Deficit 2000  Surplus  Deficit 2005  Surplus  Deficit Your Birth Year  Surplus  Deficit Estimated $ Over / Under Budget 4. According to the graph, which year had the highest deficit? __________________ Highest surplus? __________________ Extension Activity Money Matters Teacher Guide Where Federal Money Comes From When the government needs more money it simply prints more bills! TRUE or FALSE The money raised by the government in taxes is called __revenue___________________. Define each tax: Social Security Excise 6.2% of income Taxes paid on luxuries like gas and alcohol Corporate Percentage of what you earn Like personal income taxes for businesses Complete the table: Income Type of Tax Income 2 Social Security 940,000,000,000 3 Coporate 222,000,000,000 4 Excise Taxes 77,000,000,000 5 Other 81,000,000,000 Estate taxes, tariffs, etc. 4 5 How Much Money 1 Other Taxes 3 11 1,061,000,000,000 2 2010 Federal Revenue With all the revenue and spending projects, there is only one thing that can keep it all straight… Define: The _Federal Budget___________________________________ Budget: Federal Budget: A plan for receiving and spending money The U.S. government’s plan to raise revenue and spend money Circle the area of spending that received the MOST funding in 2010. Put a star next to the area of spending that you think should receive the most funding: Education Defense Social Security Income Security Health Transportation Energy Medicare Science Environment Write the 2010 total estimated spending in long form and the way you would say it: 3,600,000,000,000 Identify and define: or three trillion six hundred billion or 3.6 trillion Two Possible Outcomes surplus: the government has spent less than it raised in revenue deficit: the government has spent more than it raised in revenue In 2010, was there a SURPLUS or a DEFICIT? _Deficit_____________ Guided Notes ea. a. Teacher Guide Money Matters Cooperville’s Budget for 2011 Cooperville is a country on a far away continent. Its president is in charge of designing the whole budget. She and her advisors are just sitting down to plan their budget for the year 2011 and they need some help organizing and reading the information that they have in front of them. You’ve been called in to help sort out their budgeting mess. These are the facts:  Cooperville is earning $570,000,000,000 in income taxes.  Cooperville is spending $4,303,000,000 on defense.  Cooperville is spending $6,457,000,000 on healthcare.  Cooperville is earning $10,000,000,000 in excise taxes.  Cooperville is spending $500,000,000,000 on social security.  Cooperville is spending $3,000,000,000 on education.  Cooperville is spending $5,430,000,000 on agriculture.  Cooperville is earning $135,000,000,000 in social security.  Cooperville is spending $220,000,000,000 on smaller projects. Complete the following chart, listing revenues and expenses from GREATEST to LEAST: Revenue Type Revenue Income Taxes $570,000,000,000 Expense Type Expense Social Security $500,000,000,000 Small projects $220,000,000,000 Healthcare $6,457,000,000 Agriculture $5,430,000,000 Social Security $135,000,000,000 Defense $4,303,000,000 Excise Taxes $10,000,000,000 Education $3,000,000,000 TOTAL REVENUE TOTAL EXPENSES $715,000,000,000 $739,190,000,000 Calculate. Answer the questions below to see where Cooperville’s budget stands. 1)Which figure is higher?  Revenue Expenses 2)Find the difference between total revenues and expenses in Cooperville. Show your math here. 3)Is this difference a surplus or a deficit?  Surplus Deficit 4) How do you know? $739,190,000,000 - $715,000,000,000 A. The expenses are higher than the revenue $24,190,000,000 B. The revenue is higher than the expenses 5) What are the two possible ways Cooperville could balance its budget? Increase ______taxes_______ - OR - Decrease _______spending________ Processing Activity p.1 Teacher Guide Money Matters Facts and Figures. Use the chart below to answer the following questions. Deficit Surplus 1. An alternate title for this chart might be A. Amount of Yearly Spending in Billions of Dollars B. Annual Deficit in Billions of Dollars 2. Label the lines above and below the x-axis with the terms SURPLUS and DEFICIT. HINT: A DEFICIT means spending MORE than your budget 3. Complete the blanks in following table: Year Budget Outcome Estimated $ Over / Under Budget (in billions) 1980  Surplus  Deficit $80 billion over budget 1985  Surplus  Deficit $210 billion over budget 1990  Surplus  Deficit $215 billion over budget 1995  Surplus  Deficit $175 billion over budget 2000  Surplus  Deficit $240 billion under budget 2005  Surplus  Deficit $310 billion over budget Your Birth Year  Surplus  Deficit 2004 4. According to the graph, which year had the highest deficit? __________________ 2000 Highest surplus? __________________ Extension Activity