4. Fiscal Federalism Flashcards
Fiscal federalism
How various levels of governments share responsibilities for various functions and raise resources. 
1990 act that Provides a framework for federal spending
The budget and enforcement act
Mandatory spending makes up this percentage of total spending
Approximately 70%
Examples of Means tested spending
Medicaid, food stamps, family support assistance, SSI, children’s health insurance, veteran pensions
Discretionary spending is what percent of total federal spending?
30% this includes national defense (50%) and non-defense discretionary (50%)
True or false: national defense is more than half my federal budget.
False.
national defense is a little more than half of the discretionary budget which is only 30% of the total budget
The very first power granted to congress in article 1 section 8 of the new constitution
Power to lay and collect taxes to pay the debts and provide for common defense and general welfare of the United States
The last clause of article 1 section 8
To make all laws which shall be necessary and proper for carrying into the execution of the foregoing powers, and all other powers vested by this constitution in the government of the United States.
10th amendment
The powers not delegated to the United States by the constitution nor prohibited by it to the states are reserved to the states respectively or to the people.
Also known as the Reserve Powers
Article 1, section 10
Prohibits states from taxing imports or exports
Article 1, section 9
Prohibits Congress from taxing articles exported from any state. Also prohibits Congress from taxing ships going between states
Early sources of federal revenue
Exercise, tariff taxes, and the sale of Western lands
Congress adopted a property tax in what year?
- But the tax was never put into effect. 
In 1902 the federal government’s domestic spending was primarily for…
The postal service
Historically, state government spent revenues on
Education, health, welfare, and corrections.
Historically, local government spent revenues on
Police, fire, sanitation, education, and highways
In 1902 the federal government spent this much on the Postal Service
$126 million. This was about 55% of total domestic federal spending
In 1902 which level of government had the highest spending?
Local
This event led to a need for greater and more reliable revenue sources, especially at the federal level
The great depression
The 16th amendment did this
Authorized federal government to collect an income tax. This is generally thought of as a very efficient elastic and progressive tax. As personal wealth gross income tax receipts grow proportionally.
How does the 16th amendment differ from the original language of the constitution with regard to apportionment
The original language of the constitution says the taxes shall be apportioned among several states. The 16th amendment stated that taxes can be collected without apportionment among the several states and without regard to any census
More than half of federal revenue comes from
Individual income tax
States top two types of revenue sources
Intergovernmental and sales tax
Local governments top to revenue sources
Intergovernmental and property tax
