Part One: look at the agreement on the bottom of page 601, reflect on the positives and negatives of such an agreement. Provide an example of one positive and one negative.
Part Two: Reflect on this idea, should the Federal Government promote and increase global free trade? Answer should be 5-7 sentences in length.
An import quota is a limit put on the amount of a commodity that can be imported into a country. While recently limited by international agreements, import quotas are still in place in the United States on such items as cotton, sugar, and milk. Many European nations have put a quota on American films and television shows to encourage the production of their own features and to protect national cultures.
Trade Embargoes and Sanctions Trade embargoes and sanctions are more significant trade barriers—and are more often used to apply diplomatic pressure or as a punishment rather than as an economic tool. A trade embargo is a ban on trade with a particular country or countries. Sanctions are similar to embargoes. An embargo might be placed on all goods or only specific items. It can be placed on exports or, separately, on imports. The United States has used trade embargoes largely to promote its foreign policy positions. For example, the United States has maintained a complete economic embargo on Communist Cuba since the early 1960s.
Embargoes can be effective, but notice that they may also hurt the domestic economy of the nation imposing them. The U.S. embargo on Cuba has not yet changed Cuba's political regime but does close off Cuba to American businesses. Economists estimate that opening the United States to trade with Cuba could add $1.2 billion to the U.S. GDP.
Free Trade in North America The North American Free Trade Agreement, known as NAFTA, became effective in 1994. NAFTA established free trade among the United States, Canada, and Mexico, and intended to eliminate, in steps, all tariffs and other barriers to trade by 2009. It created what amounts to the world's largest free trade zone.
NAFTA was approved only after a great deal of controversy and resistance, especially in the United States.
Advocates of NAFTA argued that the United States should be able to trade freely with its nearest neighbors, the countries with which the United States shares borders, and that improving the economy of the entire region could not help but be good for the U.S. economy as well. Opponents of the agreement were concerned that American manufacturing operations would be moved to Mexico, where wages are lower and regulations are fewer, and lead to huge job losses. Others worried that imports without tariffs would put American businesses at a huge disadvantage.
Supporters insisted that the expected increase in exports to Canada and Mexico would mean an increase in American jobs. They also argued that an improved economy would create greater prosperity and stability in Mexico, and so reduce illegal immigration from that country.
Pros and Cons Today, nearly all facets of NAFTA are in place; the results seem to indicate that the pact was on the whole good for U.S. trade and investment, but not positive for all American workers. Although the long-term results are hard to distinguish from other trends, it appears that NAFTA accelerated the loss of high-paying manufacturing jobs.
Economists estimate that the United States has lost approximately 600,000 jobs as a result of regional competition for work made possible by NAFTA. For example, jobs in the American textile and clothing sectors, already in decline, decreased steeply. However, many manufacturing jobs that have left the United States have moved to countries other than Mexico or Canada. Meanwhile, Mexico has lost agricultural jobs, and some of its agricultural workers have illegally immigrated to the United States.
In addition to its effects on the total number of manufacturing jobs in the U.S., NAFTA has affected the amount that industrial workers overall are paid. Wages paid for factory jobs within the United States have dropped, or in some cases have not risen to meet inflation, since NAFTA was passed.
Mining equipment is one example of exports from the United States to Australia. Trade between the two countries rose 23 percent in 2005, the year after a free trade agreement (AUSFTA) was signed.
On the positive side, trade—in agricultural products especially—has increased dramatically with the elimination of nearly all trade barriers. Between 1993 and 2011, United States merchandise exports to Mexico rose from $41 billion to more than $198 billion.
Part One:
Positive: One positive of the agreement is that it can protect industries within a country from being negatively impacted by competing imports, which could lead to job losses and economic damage. For example, a country may impose an import quota on steel to protect its domestic steel industry and prevent foreign steel from flooding the market and undercutting local producers.
Negative: One negative of the agreement is that it can limit consumer choice and potentially increase prices for goods. For example, if a country places an import quota on a popular type of fruit, consumers may have a harder time finding that fruit in stores and may have to pay more for it due to limited supply.
Part Two:
The question of whether the Federal Government should promote and increase global free trade is a complex one. On the one hand, free trade can lead to increased economic growth, innovation, and access to new markets and products. It can also foster positive relationships between countries and promote cooperation on a global scale. On the other hand, free trade can lead to job losses and economic disruption in certain industries, which can have negative effects on workers and communities. Additionally, some argue that free trade can exacerbate wealth inequality and environmental degradation. Ultimately, any decision to promote and increase free trade must carefully consider these competing factors and strive for a balance that benefits as many people and sectors as possible.
Part One: look at the agreement and reflect on the positives and negatives of such an agreement. Provide an example of one positive and one negative.
Part Two: Reflect on this idea, should the Federal Government promote and increase global free trade? Answer should be 5-7 sentences in length.
Analyze Charts How would the cost of a China-produced solar panel be affected by a decrease in the tariff on U.S.-produced polysilicon?
An import quota is a limit put on the amount of a commodity that can be imported into a country. While recently limited by international agreements, import quotas are still in place in the United States on such items as cotton, sugar, and milk. Many European nations have put a quota on American films and television shows to encourage the production of their own features and to protect national cultures.
Trade Embargoes and Sanctions Trade embargoes and sanctions are more significant trade barriers—and are more often used to apply diplomatic pressure or as a punishment rather than as an economic tool. A trade embargo is a ban on trade with a particular country or countries. Sanctions are similar to embargoes. An embargo might be placed on all goods or only specific items. It can be placed on exports or, separately, on imports. The United States has used trade embargoes largely to promote its foreign policy positions. For example, the United States has maintained a complete economic embargo on Communist Cuba since the early 1960s.
Embargoes can be effective, but notice that they may also hurt the domestic economy of the nation imposing them. The U.S. embargo on Cuba has not yet changed Cuba's political regime but does close off Cuba to American businesses. Economists estimate that opening the United States to trade with Cuba could add $1.2 billion to the U.S. GDP.
Free Trade in North America The North American Free Trade Agreement, known as NAFTA, became effective in 1994. NAFTA established free trade among the United States, Canada, and Mexico, and intended to eliminate, in steps, all tariffs and other barriers to trade by 2009. It created what amounts to the world's largest free trade zone.
NAFTA was approved only after a great deal of controversy and resistance, especially in the United States.
Advocates of NAFTA argued that the United States should be able to trade freely with its nearest neighbors, the countries with which the United States shares borders, and that improving the economy of the entire region could not help but be good for the U.S. economy as well. Opponents of the agreement were concerned that American manufacturing operations would be moved to Mexico, where wages are lower and regulations are fewer, and lead to huge job losses. Others worried that imports without tariffs would put American businesses at a huge disadvantage.
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Supporters insisted that the expected increase in exports to Canada and Mexico would mean an increase in American jobs. They also argued that an improved economy would create greater prosperity and stability in Mexico, and so reduce illegal immigration from that country.
Pros and Cons Today, nearly all facets of NAFTA are in place; the results seem to indicate that the pact was on the whole good for U.S. trade and investment, but not positive for all American workers. Although the long-term results are hard to distinguish from other trends, it appears that NAFTA accelerated the loss of high-paying manufacturing jobs.
Economists estimate that the United States has lost approximately 600,000 jobs as a result of regional competition for work made possible by NAFTA. For example, jobs in the American textile and clothing sectors, already in decline, decreased steeply. However, many manufacturing jobs that have left the United States have moved to countries other than Mexico or Canada. Meanwhile, Mexico has lost agricultural jobs, and some of its agricultural workers have illegally immigrated to the United States.
In addition to its effects on the total number of manufacturing jobs in the U.S., NAFTA has affected the amount that industrial workers overall are paid. Wages paid for factory jobs within the United States have dropped, or in some cases have not risen to meet inflation, since NAFTA was passed.
Mining equipment is one example of exports from the United States to Australia. Trade between the two countries rose 23 percent in 2005, the year after a free trade agreement (AUSFTA) was signed.
On the positive side, trade—in agricultural products especially—has increased dramatically with the elimination of nearly all trade barriers. Between 1993 and 2011, United States merchandise exports to Mexico rose from $41 billion to more than $198 billion.
Meanwhile, Mexico's own manufacturing industry has grown because the United States imposes tariffs on high-tech goods coming from countries that are not part of NAFTA, so goods produced in Mexico cost less for American consumers. Of the three countries that agreed to NAFTA, Canada has experienced the highest economic growth. Canada's growth has affected the United States economy as well because Canada now imports more agricultural products from the United States than it did before signing NAFTA.
Other Trade Agreements While NAFTA affects only trade with Canada and Mexico, it provides a model for freer trade with other countries. The United States has signed similar treaties, although involving much smaller trade flows, with Australia and countries in Latin America, the Middle East, Africa, and Asia. For example, in 2012 Congress ratified a free trade agreement reducing tariffs on goods imported from South Korea and making the Korean market more accessible to U.S. auto manufacturers, U.S. law firms, and U.S. suppliers of financial services.
The United States International Trade Commission estimated that the agreement with South Korea would result in an increase of between $10 billion and $12 billion to the United States GDP each year, mostly in merchandise exports to Korea.
As of 2014, President Barack Obama was also negotiating a free trade agreement with the European Union—an agreement that he hopes will increase the GDP by another $122 billion. This agreement, called the Transatlantic Trade and Investment Partnership (TTIP), could rival NAFTA in its size and scope if approved by Congress.
Trade Alliances and Organizations
The United States employs the tools of protectionism to support industries and workers at home. It also uses them to enlarge economic opportunities, strengthen international ties, and open new markets abroad. It often does this through membership in free trade agreements and international alliances and organizations.
Part One:
Positive: One positive of free trade agreements, such as NAFTA, is that they can create new markets and increase export opportunities for businesses, leading to greater economic growth and prosperity. For example, NAFTA has greatly increased trade between the United States and Canada, with merchandise exports to the country rising from $41 billion to more than $198 billion between 1993 and 2011.
Negative: One negative of free trade agreements is that they can lead to job losses and economic disruption in certain industries, particularly those that are not as competitive as others. For example, NAFTA has been criticized for accelerating the loss of high-paying manufacturing jobs in the United States, particularly in the textile and clothing sectors.
Part Two:
The Federal Government should promote and increase global free trade, but not at the expense of domestic job losses and economic disruption. Free trade can have many positive effects, including increased economic growth, innovation, and access to new markets and products. However, the government must also ensure that workers and industries that may be negatively impacted by free trade agreements receive support and protection, such as job training programs and investment in domestic industries. Additionally, the government should address issues such as intellectual property protection, labor rights, and environmental sustainability in these agreements to ensure fairness and sustainability in global trade.
Using the passage explain 3 different types of revenue. How is it collected? How is the amount determined? Is it progressive, regressive or neither? Answer should be 4-6 sentences in length.
Sources of State Revenue
Beyond the limits noted, a State can levy taxes as it chooses. The legislature decides what taxes the State will impose, and at what rates. It decides, too, what taxes localities can levy.
Sales Tax Revenue The sales tax is the most productive source of State-levied income today. It accounts for about a third of all tax monies collected.
A sales tax is a tax placed on the sale of various commodities; the purchaser pays it. It may be either general or selective in form. A general sales tax is one applied to the sale of most commodities. A selective sales tax is one placed on the sale of only certain commodities.
In 1932, Mississippi became the first State to levy a sales tax. Today, 45 States do so. The rates range from 2.9 percent in Colorado to as much as 7.5 percent in California; most States now peg the rate at between 5 and 7 percent. Some things are exempted from the tax almost everywhere—most commonly, food, medicine, and newspapers. A growing number of cities, and some urban counties, also levy sales taxes today—a “piggy-back tax,” added on to and collected with the State tax.
All 50 States impose a selective sales tax on gasoline, alcoholic beverages, cigarettes, and insurance policies. Many of them also place selective sales taxes on such things as hotel and motel accommodations, restaurant meals, and theater and other amusement admissions.
Sales taxes are widely used for two major reasons: They are easy to collect, and they are dependable revenue producers. Yet a sales tax is a regressive tax—that is, it is not levied according to a person's ability to pay. The tax falls most heavily on those least able to pay it.
Analyze Maps What generalization can you make about the States with the highest gasoline taxes?
States are prohibited from collecting the sales taxes on most Internet purchases. That is because products made in one State are sold online to customers across the country. As more and more people shop via the Internet, the States complain that the drain on their sales tax receipts could very well lead to a reduction of public services and/or an increase in their sales tax and other tax rates. In 2007, Congress, acting under its commerce power, put a seven-year moratorium on State taxation of e-commerce.
Income Tax Revenue The income tax, which is levied on the income of individuals and/or corporations, yields a quarter of State and local tax revenues today. Wisconsin enacted the first State income tax in 1911. Today, 43 States levy an individual income tax; 46 have some form of corporate income tax.
The individual income tax is usually a progressive tax—that is, the higher your income, the more tax you pay. Income tax rates vary among the States, from 1 or 2 percent on lower incomes in most States to 9 percent or more on the highest incomes in a few States. Those who pay the tax receive various exemptions and deductions in calculating their taxable income.
Corporate income tax rates are usually a uniform (fixed) percentage of income. Only a few States set the rates on a graduated basis.
The progressive income tax is held by many to be the fairest—or the least unfair—form of taxation, because it can be geared to a person's ability to pay. If the rates are too high, however, the tax can discourage individual enterprise.
Property Tax Revenue Property taxes have been a major source of governmental revenue since the early colonial period. Once the major source of State revenue, they are now levied almost exclusively at the local level. They provide roughly three-fourths of all local government tax income today.
A property tax is a levy on (1) real property, such as land, buildings, and improvements that go with the property if sold; or (2) personal property, either tangible or intangible. Tangible personal property is movable wealth that is visible and the value of which can be easily assessed—for example, computers, cars, and books. Intangible personal property includes such things as stocks, bonds, mortgages, and bank accounts.The process of determining the value of the property to be taxed is known as assessment. An elected county, township, or city assessor usually carries out the task.
Supporters of the property tax argue that, because government protects property and often enhances its value, property owners can logically be required to contribute to the support of government.
hey note that the rate at which the tax is levied can be readily adjusted to meet governmental needs.
Critics insist that the property tax is not progressive, not geared to one's ability to pay. They also argue that it is all but impossible to set the value of all property on a fair and equal basis. Finally, they say that personal property is easily hidden from assessors.
Inheritance or Estate Tax Revenue Every State has some form of inheritance or estate tax, sometimes called the “death tax.” An inheritance tax is levied on the beneficiary's (heir's) share of an estate. An estate tax is one levied directly on the full estate itself.Business Tax Revenue A variety of business taxes, in addition to the corporate income tax, are important sources of revenue in most States. More than half the States impose severance taxes, which are levies on the removal of natural resources such as timber, oil, minerals, and fish from the land or water.
Every State has various license taxes that permit people to engage in certain businesses, occupations, or activities. For example, all States require that corporations be licensed to do business in the State. Certain kinds of businesses—chain stores, amusement parks, taverns, and transportation lines—must have an additional operating license. Most States also require the licensing of doctors, lawyers, hairdressers, plumbers, electricians, insurance agents, and a host of others.
Many States have levies known as documentary and stock transfer taxes. These are charges made on the recording, registering, and transfer (sale) of such documents as mortgages, deeds, and securities. Some States also impose capital stock taxes, which are levied on the total assessed value of the shares of stock issued by a business.
Other Tax Revenues A variety of other taxes are imposed by the States and their local governments in order to raise revenues. As a leading example, payroll taxes produce huge sums; the monies generated by those taxes are held in trust funds to pay unemployment benefits, accident insurance, and retirement programs. Most States levy amusement taxes for admission to theaters, sports events, circuses, and the like. Every State imposes license taxes for various nonbusiness purposes—notably, on motor vehicles and drivers, and for such things as hunting, fishing, and marriage.Nontax Revenues Taxes have never been very popular, and so State and local officials have long looked for nontax revenue sources. Today, the States and their many local governments take in more than $2 trillion a year from these sources. Much of that huge amount comes as grants from the Federal Government.
Business enterprises and user fees. State and local governments also make money from a variety of publicly operated business enterprises. Toll roads and bridges are especially popular in the East. Several States, notably Washington, are in the ferry business. North Dakota markets a baking flour, sold under the brand name “Dakota Maid,” and is also in the commercial banking business. Eighteen States are in the liquor business, selling alcohol in State-operated stores.
Many cities own and operate their water, electric power, and bus transportation systems. Some cities run farmers' markets; rent space in their office buildings, warehouses, and housing projects; and operate dams and wharves. Receipts from such businesses support the local governments that own them. Other nontax sources include court fines, sales and lease of public lands, and interest from loans, investments, and late tax payments. Among the many public services for which those who use them must now pay a fee are hospitals, airports, parks, water, sewers, and garbage disposal. Lotteries. For many years, nearly all forms of gambling were outlawed in every State except Nevada. Most States have relaxed their anti-gambling laws, hoping to attract dollars, jobs, and tourists. Today, only Hawaii and Utah do not permit any kind of gambling.
State-run lotteries net some $19 billion per year for 43 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Lotteries provide revenue without raising taxes. Supporters note that they are popular, voluntary, and offer an alternative to illegal gambling. Opponents say that lotteries prey on the poor and encourage compulsive gambling.
Lottery proceeds are used for a number of purposes among the States. About half of the States with lotteries earmark all or most of their revenue for education. Some channel the money directly to the State's general fund, while others dedicate most of it to economic development or a wide range of other uses.
Borrowing Funds The States and many of their local governments regularly borrow money to pay for such large undertakings as the construction of schools, highways, hospitals, sports facilities, and college dormitories. Much of that borrowing is done by issuing bonds, much as the Federal Government does. Generally, State and local bonds are fairly easy to market because the interest paid on them is not subject to State or federal income taxes.
At various times in the past, many State and local governments defaulted on their debts. Thus, most State constitutions now place quite detailed limits on the power to borrow. Altogether, the 50 States' debts now total about $5.1 trillion and local governments owe more than $1.8 trillion.
A public budget is much more than bookkeeping entries and dollar signs. It is a financial plan, a plan for the control and use of public money, public personnel, and public property. It is also a political document, a highly significant statement of public policy. In the State budget, the State's leaders establish their State's priorities and decide who gets what, and who doesn't.
The Budget Process in the Past For more than 150 years, State budgets were the product of haphazard and uncoordinated steps centered in the legislature. Various State agencies appeared before legislative committees, each seeking its own funding, often in fierce competition with one another. Their chances of success depended far less on need or merit than on whatever political muscle they could bring to bear.
Part One:
The agreement on the bottom of page 601 refers to the North American Free Trade Agreement (NAFTA). Here is an example of one positive and one negative aspect of the agreement:
Positive: One positive aspect of NAFTA is the increased trade and economic integration between the United States, Canada, and Mexico. This has led to significant growth in exports and increased business opportunities for companies in all three countries. For example, the elimination of trade barriers has facilitated the export of agricultural products from the United States to Mexico, resulting in a significant increase in merchandise exports.
Negative: One negative aspect of NAFTA is the concern about job losses, particularly in the American manufacturing sector. Critics argue that the agreement led to the relocation of manufacturing operations to Mexico, where labor costs are lower and regulations are less stringent. This has resulted in the loss of high-paying manufacturing jobs in the United States, which has had a negative impact on certain industries and communities.
Part Two:
The question of whether the Federal Government should promote and increase global free trade is a complex issue with various perspectives. Here are a few key points to consider:
1. Economic Growth: Supporters argue that promoting global free trade can stimulate economic growth by expanding market access and creating opportunities for businesses to expand internationally. Increased trade can lead to job creation, increased productivity, and higher living standards for countries involved in free trade agreements.
2. Comparative Advantage: Free trade allows countries to specialize in producing goods and services where they have a comparative advantage, leading to increased efficiency and competitiveness. By removing trade barriers, countries can focus on producing goods and services where they have a competitive edge, leading to increased productivity and lower costs.
3. Consumer Benefits: Global free trade can benefit consumers by providing them with a wider range of goods and services at lower costs. With access to a greater variety of products from different countries, consumers can enjoy higher quality and more affordable options.
4. Global Cooperation: Advocates argue that promoting free trade fosters international cooperation and peaceful relations among nations. By engaging in economic exchanges, countries can build trust and understanding, reducing the likelihood of conflicts and promoting stability.
5. Job Displacement: Opponents of free trade argue that it can lead to job displacement and negative impacts on certain industries or regions. Industries that cannot compete globally may experience job losses, resulting in unemployment and economic hardships for affected communities.
6. Income Inequality: Critics also raise concerns about income inequality, suggesting that the benefits of free trade may not be evenly distributed. Some argue that free trade can widen the wealth gap and lead to exploitation of workers in countries with weaker labor regulations.
In conclusion, the Federal Government's promotion and increase of global free trade is a complex issue with both potential benefits and drawbacks. It requires careful consideration of economic, social, and political implications, weighing the advantages of economic growth and increased market access against potential job losses and income inequality.
Part One:
To analyze the positives and negatives of the agreement mentioned on the bottom of page 601, you would need to refer to the specific agreement being mentioned. The agreement is not provided in the text provided, so it is not possible to provide an example of one positive and one negative.
To find the agreement being referred to, you could follow these steps:
1. Take note of the information provided about the agreement, such as any specific information mentioned (e.g., name of the agreement, countries involved, purpose).
2. Use a search engine or platforms that provide access to legal documents, such as government websites or databases.
3. Search for the specific agreement using the information gathered in step 1.
4. Once you find the agreement, read through it to understand its terms and provisions.
5. Reflect on the positives and negatives mentioned in the agreement based on its content and context.
Part Two:
In reflecting on whether the Federal Government should promote and increase global free trade, you can form your own opinion based on the information provided and personal beliefs. As an AI, I can provide an analysis of the topic, but I cannot provide a personal opinion. Here is an analysis to help you structure your answer:
Promoting and increasing global free trade is a complex and debated topic. Advocates argue that free trade can lead to economic growth, increased competition, efficiency, and the sharing of resources globally. They believe that free trade allows countries to specialize in the production of goods and services in which they have a comparative advantage, leading to increased output and overall welfare. It is also argued that free trade can promote peaceful relationships between countries by fostering interdependence.
On the other hand, opponents of global free trade argue that it can lead to job losses in certain industries and income inequality within countries. They highlight the possibility of unfair competition, where countries with lower labor and environmental standards exploit the system, leading to a race to the bottom. Critics also suggest that free trade can undermine domestic industries and negatively impact national security.
When considering whether the Federal Government should promote and increase global free trade, it is important to strike a balance between the potential benefits and drawbacks. Governments can implement policies and regulations that protect domestic industries and workers, ensure fair competition, and address concerns about labor rights and environmental standards. These measures can help maximize the benefits of global free trade while mitigating its potential negative impacts. Ultimately, the decision should be guided by a comprehensive assessment of the specific circumstances and potential consequences for a country's economy and society.