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How Taxes Affect Revenue Streams

Taxes and user fees provide much of the revenue for public organizations that is necessary to fund public programs. Yet, despite these revenue streams, local, state, and federal governments consistently face budgetary shortfalls in attempting to fund public programs. What changes, if any, would you make to the way governments obtain revenue for public programs? Consider the following questions: would you make any changes to individual and corporate income tax rates, property taxes, or sales taxes? Would you increase or decrease user fees? Do you think that a flat tax might be a more appropriate way to generate revenue? Would a national sales tax (not to be confused with state sales taxes) be a sensible method to raise revenue?

Solution Preview

We have to really look at this issue. Monies collected from various taxes, including income taxes, sales taxes, and other taxes are currently the biggest source of revenue for the government, and that includes the local, state, and federal government. How much more can we pay in taxes? I pay property taxes to live in my house. I go to furnish my house and pay sales tax on all of the furniture and other furnishings that I buy. I then go to work and pay employment taxes as I work. If I am the owner of a company, I then have to make appropriate funding for corporate income taxes, assuming my business made a profit. I then come home from work and find that there is a notice in my mailbox that my mortgage ...

Solution Summary

Taxes and user fees provide much of the revenue for public organizations that is necessary to fund public programs. Yet, despite these revenue streams, local, state, and federal governments consistently face budgetary shortfalls in attempting to fund public programs. What changes, if any, would you make to the way governments obtain revenue for public programs? Consider the following questions: would you make any changes to individual and corporate income tax rates, property taxes, or sales taxes? Would you increase or decrease user fees? Do you think that a flat tax might be a more appropriate way to generate revenue? Would a national sales tax (not to be confused with state sales taxes) be a sensible method to raise revenue?

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