CHAPTER TWELVE TAX AND SPENDING. Copyright © Houghton Mifflin Company. All rights reserved.12 | 2 The Principles of Finance Interdependence Diversity.

CHAPTER TWELVE

TAX AND SPENDING

Copyright © Houghton Mifflin Company. All rights reserved. 12 | 2

The Principles of Finance

• Interdependence

• Diversity


Table 12.1 State and Local Taxes as a Percentage of Income


Revenues

• Criteria for Evaluating Taxes

– Equity

– Yield

– Elasticity

– Ease of Administration

– Political Accountability

– Acceptability


Revenues (continued)

• Major State and Local Taxes

– Property Tax

– Sales Tax

– Income Tax

– Miscellaneous Taxes


Figure 12.1 Distribution of Total State and Local Tax Revenue by Source, 2004


Table 12.2 Rating State and Local Taxes According to Six Criteria


Revenues (continued)

• User Fees

• Severance Tax

• Gambling: Lotteries and Casinos


The Political Economy of Taxation

• Spending

• Tax Revolt

• Fiscal Stress

• Limited Discretion


Figure 12.2 Total State and Local Spending by Area


Borrowing and Debt

• Estimating Revenues

• Rainy Day Funds

• Other Financial Management Practices

– Long-term Borrowing

– Limits on Borrowing


Where All the Money Goes: State and Local Spending

• Economic Development

• Education Policy

• Social Welfare and Health Care Policy

CHAPTER TWELVE TAX AND SPENDING. Copyright © Houghton Mifflin Company. All rights reserved.12 | 2 The Principles of Finance Interdependence Diversity.

Documents

spending slide

borrowing slide

area slide

percentage of income

local tax revenue

major state

rating state

revenues criteria