Question

1. Which is the largest source of revenue for the Federal government? California State government?

2. What item takes the largest share of the federal government spending? State government spending?

3. What is the most recent outstanding national debt of United States? Assuming a 340 million population in United States, what is the per capita debt of United States?

4. Why are taxes on common items such as gasoline and toiletries considered highly regressive? Explain clearly.

Answer 1

The individual income tax has been the largest source of federal evenue since 1950 which amounts to about 50%of the total and8.1 % of GDP in 2019.

The personel income tax is the California state's largest source of revenue and is expected to account for 68.8%of the general fund revenue in 2019-20.

The largest category of federal spending is social program including social security, Medicare, Medicaid.

Public welfare and education were the biggest expenditures of California state government .

The official figure for the debt of the federal government on May 27 ,2020 is $25.6 trillion.

Assuming 340 million population in US and federal government debt to be 25.6 trillion,per capita debt of US is federal debt divided by population ie 25.6 divided by 340=0.075

4)Sales tax are considered regressive because they take away a larger percentage of income from low income tax payers than from high income tax payers.Gasoline tax and tax on toiletries is regressive because the poor cannot afford to pay the tax.However the poor do not spend much more of their income on gasoline and toiletries as compared to  the rich.