TAXATION:
All levels of government
- national, state, county, and city -
provide services to the public.
We expect government to provide for national defense, public education, snow
removal, and a variety of other services.
In order to provide services, government needs to raise
revenue.
The primary method of raising revenue
by government is
taxation.
The public pays taxes so that the government has money to provide the
services we expect.
The national government raises the largest part of its revenue through
income taxes
on business and individuals. Other sources of revenue include
customs duties
- a tax on goods brought into the United States, and
estate taxes
- a tax on a deceased person's property and possessions.
Ohio, like all other states, collects taxes too. Much of Ohio's revenue comes
from
sales taxes,
income taxes,
inheritance taxes, and business
license
fees.
Taxes most commonly collected by local governments include
property taxes,
sales taxes,
license
fees for dogs and fishing, and other fees for activities such as parking and
camping.
SCARCITY:
In any
nation, regardless of its
economic system, a problem arises because
there are not enough
resources
or goods to meet the needs or wants of the people. This problem of unlimited
wants and limited resources is known as
scarcity.
Scarcity is the fundamental economic problem of every nation.
No country has unlimited resources.
Each nation must make choices about what to produce and how much to produce.
The classic example of the problem of scarcity for a nation is the need to
produce guns and butter. No nation produces all the guns and butter its people
need and want because there are limited resources. Therefore, nations must
choose how many guns and how much butter to produce to best satisfy their
needs. If too many guns are produced, a nation might feel safe and secure, but
not have enough food for people to eat. If too much butter is produced, a
nation might have enough food to eat, but not enough weapons to protect itself
from attack or invasion.
On an individual level, people also have to face the problem of scarcity. Most
people have limited resources and unlimited wants. Therefore, people must
choose how to use their limited resources to best satisfy their unlimited
wants. For example, a check for $100 would not satisfy all your wants. You
would need to decide how to spend that limited amount of money to best satisfy
your unlimited wants. If the check was for $1,000, it would still not satisfy
all your wants. It would, of course, satisfy more of your wants than the $100.
However, you would still need to choose to buy some goods now, and wait to buy
other goods later.
INTERDEPENDENCE:
All nations have wants they cannot satisfy by themselves, because they do not
have the resources. Therefore, nations find it necessary to
trade
with one another to satisfy their needs. Nations sell goods and services in which they
specialize
and have a surplus. Money made from such trade is used to purchase needed
goods and services other nations can provide.
Japan is one of the world's great economic powers. Yet it produces no oil.
Japan specializes in products such as cars and electronics. It produces many
such products in order to sell them to other countries. Using money made by
selling the goods in which the Japanese specialize, Japan buys the oil it must
have.
Although the United States has oil, its oil resources are limited. It must
trade with other countries to buy oil, as well as other goods and services
which it needs.
No nation is economically independent. All nations are
interdependent.
Because nations have limited resources, they need to trade with each other to
satisfy their wants.
