Dq1 Unit 2 Case Study

DQ1
SC the number one source of revenue was individual income taxes which were approximately $976,054 for the 4th quarter of 2011. The 2nd largest source of revenue for SC was general sales and gross receipts which was approximately $686,433. The third largest source of revenue for SC was motor fuel sales taxes which were approximately $129,622. The income tax funds are used for education, Medicare/Medicaid, low income housing, and other federal programs. The burden of SC and local taxation is relatively low for state and local taxes compared to other states. According to Table 3, North Carolina did not have any property tax revenue, but have a large revenue from general sales and gross receipts. the state burden for Georgia is individual income tax. the highest producers of revenue thus they are the highest tax paid by the residents of the states. Georgia mainly relies on the taxation of working incomes as this is their major revenue source.

DQ2
Based on the “Tax Proposals in the 2011 Budget: What’s in It for You?” e-Activity, explain the implications of the proposal for your state’ s
budget of your state with respect to: Individual taxation – According to the ABC news article President Obama has proposed strong budget cuts and many of them seem to be focused on the lower and middle class American.
He has proposed a budget with more than $140 million in tax cuts “designed to ease the burden of the burdens a middle class family faces when caring for children, paying for college and saving for retirement. He has proposed extending the Bush era budget cut for individuals and families earning less than $200,000 and $250,000 respectively. He has also proposed extending the “Making Work Pay Tax Credit” while at the same time proposing tax cuts and tax rate and capital gains increases for individuals and families making more than $200,000 and $250,000 respectively. So it just seems that he is trying to help the “regular” person/family while the country is still coming back from the
recession. Corporate taxation – As for the corporate arena, he is proposing eliminating capital gains tax on new investments to help the small business but not the same for large businesses and corporations. He is also proposing an extension to a bill that would allow small businesses to immediately expense $250,000 of qualified investments. Although it was not specifically mentioned in the ABC news article President Obama would like to stop tax cuts and breaks for the large corporations. Many of his opponents believe that the larger corporations should continue to receive the same tax breaks because if we do not give them the breaks, they will move their production and manufacturing facilities elsewhere. Many of the corporations have already done that and have been doing that for many years so the tax breaks obviously was not making them stay. I do think that this is a Catch 22 situation. Payroll taxation – Americans who fall into the lower and middle income brackets will continue to see an small increase in the paychecks. If the tax cuts were not approved then these same Americans would have seen a 2% decrease in the checks to cover the payroll taxes. It is a double edged sword because of course we like to see an increase in our paychecks but it just means the money has to come from somewhere else.