POLS 207 1st Edition Lecture 11 Outline of Last Lecture I Government Revenues and Expenditures Outline of Current Lecture II Revenues and Expenditures A State Local Federal B Taxes C Texas Revenue and Expenditure Current Lecture 2012 Federal Income Tax Rates Texas has no personal income tax High earners have a lower tax burden according to federal tax burdens and bills Taxes Property tax Based on wealth Flat rate Tax incidence is regressive Primary user is local government Burden is older taxpayers Easily predicted income for government Only visible to property owners Preferred by nonpartisan local governments Sales tax Recent tax and they are trying to earn more and more revenue from this Flat rate Based on consumption Tax incidence is regressive Primary user is state government Hardest to predict how much states can gain from this never sure how much people are going to buy Burden is on younger people more than older Preferred by Republicans as a use tax Least visible tax Income tax Primarily used by the federal government Progressive or flat rate Progressive neutral or regressive incidence Burden is on younger taxpayers Partly visible Preferred by Democrats as an ability to pay tax State Government Revenue Taxes Federal grants Fees and licenses Interest o Texas used to have a lot of surplus from gas and oil o Earn interest from these savings Sales o 6 25 in Texas state Some cities add an additional 1 Some counties add an additional 1 Can go to 8 25 Borrowing Gambling lottery Texas Total Revenue Federal income from federal grants is 32 9 of Texas total revenue 47 1 of income comes from tax collection Projection for 2012 2013 42 State taxes 38 Federal funds 21 fees interest and other Texas Total Revenue Over Time State tax revenues have gone down Amount from federal funds has varied from 32 40 Reliance on federal funding is increasing Fees and interests have stayed approximately the same around 20 Tobacco Natural gas Insurance Franchise tax Sales tax Motor fuels Motor vehicle More income a state gets from sales tax the less it gets from income tax R 60 high end of moderate relationship Texas has a high dependency on property tax Dependent on sales and property tax But not income tax Most states have regressive taxes Delaware has progressive taxes 4 or 5 are on the line so less regressive This was data for 1995 o Seven years later all the states have gotten more regressive and now Delaware are on the line Trend 2007 the states are even more regressive in their state and local taxes Higher the personal income the higher the state and local taxes R 68 Local Government Revenue Sales Tax Insurance Trust Revenue Utility Revenue Intergovernmental Revenue Charges and Miscellaneous Property Tax Other Tax State Government Revenue 2006 Individual Income Tax Other Tax Corporate Income Tax Individual Income Tax Intergovernmental Revenue Property Tax Charges and Miscellaneous Insurance Trust Revenue Motor Vehicle Licenses Sales Tax Utility Revenue 46 states have individual income taxes Local Government Expenditure Mainly spent on education 39 State Government Expenditure 36 on social services income maintenance Highest expenditure 18 on education 16 on insurance trust Texas Trends in Expenditure 30 000 Millions of Dollars 25 000 20 000 Education 15 000 Health 10 000 Public Safety 5 000 0 Environment and Housing 1972 1978 1980 1982 1984 1986 1988 1990 Year 1992 1994 1996 1998 2000 2002 2004 Texas is ranked at the bottom for state expenditures out of the 15 largest states 14 out of 15 Last is Florida EXAM Covers chapters 3 4 and 5 Not as many scatterplots and correlations as the last exam More on culture and ideology