Embed Size (px)
Citation preview
CHAPTER TWELVE
TAX AND SPENDING
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 2
The Principles of Finance
• Interdependence
• Diversity
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 3
Table 12.1 State and Local Taxes as a Percentage of Income
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 4
Revenues
• Criteria for Evaluating Taxes
– Equity
– Yield
– Elasticity
– Ease of Administration
– Political Accountability
– Acceptability
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 5
Revenues (continued)
• Major State and Local Taxes
– Property Tax
– Sales Tax
– Income Tax
– Miscellaneous Taxes
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 6
Figure 12.1 Distribution of Total State and Local Tax Revenue by Source, 2004
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 7
Table 12.2 Rating State and Local Taxes According to Six Criteria
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 8
Revenues (continued)
• User Fees
• Severance Tax
• Gambling: Lotteries and Casinos
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 9
The Political Economy of Taxation
• Spending
• Tax Revolt
• Fiscal Stress
• Limited Discretion
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 10
Figure 12.2 Total State and Local Spending by Area
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 11
Borrowing and Debt
• Estimating Revenues
• Rainy Day Funds
• Other Financial Management Practices
– Long-term Borrowing
– Limits on Borrowing
Copyright © Houghton Mifflin Company. All rights reserved. 12 | 12
Where All the Money Goes: State and Local Spending
• Economic Development
• Education Policy
• Social Welfare and Health Care Policy
