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TAMU POLS 207 - Government Revenues and Expenditures II
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2012 Federal Income Tax RatesTexas has no personal income tax.High earners have a lower tax burden according to federal tax burdens and bills.TaxesProperty taxBased on wealthFlat rateTax incidence is regressivePrimary user is local governmentBurden is older taxpayersEasily predicted income for governmentOnly visible to property ownersPreferred by nonpartisan local governmentsSales taxRecent tax and they are trying to earn more and more revenue from this.Flat rateBased on consumptionTax incidence is regressivePrimary 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 olderPreferred by Republicans as a “use tax”Least visible taxIncome taxPrimarily used by the federal governmentProgressive or flat rateProgressive, neutral or regressive incidenceBurden is on younger taxpayersPartly visiblePreferred by Democrats as an “ability to pay” taxState Government RevenueTaxesFederal grantsFees and licensesInterestTexas used to have a lot of surplus from gas and oil.Earn interest from these savingsSales6.25% in Texas (state)Some cities add an additional 1%Some counties add an additional 1%Can go to 8.25%BorrowingGambling/lotteryTexas Total RevenueFederal 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 taxes38% Federal funds21% fees, interest and otherTexas Total Revenue Over TimeState 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%.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 taxDependent on sales and property taxBut not income taxMost states have regressive taxes.Delaware has progressive taxes.4 or 5 are on the line – so less regressiveThis was data for 1995.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 RevenueState Government Revenue 200646 states have individual income taxes.Local Government ExpenditureMainly spent on education (39%)State Government Expenditure36% on social services & income maintenance. Highest expenditure.18% on education16% on insurance trustTexas Trends in ExpenditureTexas is ranked at the bottom for state expenditures out of the 15 largest states – 14 out of 15. Last is Florida.EXAMCovers chapters 3, 4, and 5.Not as many scatterplots and correlations as the last exam.More on culture and ideology.POLS 207 1st Edition Lecture 11Outline of Last Lecture I. Government Revenues and ExpendituresOutline of Current Lecture II. Revenues and ExpendituresA. State, Local, FederalB. TaxesC. Texas Revenue and ExpenditureCurrent 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- Interesto Texas used to have a lot of surplus from gas and oil. o Earn interest from these savings- Saleso 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%.← ← More income a state gets from sales tax the less it gets from income tax. R =.60 -high end of moderate relationship.←TobaccoNatural gasInsuranceFranchise tax Sales taxMotor fuelsMotor vehicle← 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←Intergovernmental RevenueIndividual Income TaxProperty TaxOther TaxCharges and MiscellaneousInsurance Trust RevenueUtility RevenueSales Tax←← State Government Revenue 2006←Intergovernmental RevenueIndividual Income TaxProperty TaxOther TaxCharges and MiscellaneousInsurance Trust RevenueUtility RevenueSales TaxMotor Vehicle LicensesCorporate Income Tax← 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←Year200420022000199819961994199219901988198619841982198019781972Millions of


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TAMU POLS 207 - Government Revenues and Expenditures II

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