Government Policies & Taxes – Stay Informed, Stay Prepared

Government policies like tax cuts, stimulus checks, or spending programs can boost the economy by increasing demand. Other policies, like raising interest rates, are used to slow inflation.

Fiscal policy is how the government uses spending and taxes to influence the economy. It can increase spending to create jobs or raise taxes to reduce inflation.

Monetary policy is how the central bank (the Federal Reserve in the U.S.) controls the money supply and interest rates. It helps manage inflation and economic growth.

Income tax is a portion of your earnings that you pay to the government each year. Most workers in the U.S. must file taxes if they make over a certain amount.

Tax brackets show how much tax you pay based on your income. The more you earn, the higher your rate—but you only pay that rate on the portion above each bracket.

Programs like the Earned Income Tax Credit (EITC), Child Tax Credit, or education deductions can reduce what you owe or increase your refund. Many people qualify but don’t know it.