Financing State Government Flashcards
political values
a set of beliefs about political processes and the role that government should play in our society.
public goods
goods or services characterized by the features of nonexcludability and nonrivalrous consumption; they are often provided by governments.
nonexcludability
the inability to practically prevent people from receiving or enjoying a good or service due to nonpayment.
nonrivalrous consumption
situation in which the use or enjoyment of a good or service by a person(s) does not diminish the availability of that good or service for others to use or enjoy.
collective benefit
goods that are provided with no charge because there is a broader public benefit associated with the good.
redistributive goods
those goods where a government takes money from one group of citizens and gives it to other citizens; welfare is a good example.
regulatory goods
good, activity, or resource that the government regulates to prevent overuse; an example is pumping water from a commonly owned aquifer.
tax capacity
a measure of the wealth of a state or its ability to raise revenues relative to all other states.
tax effort
a measure of how close a state comes to using its tax capacity
per capita tax
the total taxes raised in a state divided by the number of residents
tax exporting
the shifting of taxes to citizens in other states; a good example is Wyoming coal, which is exported to Texas to generate electricity.
consumer taxes
taxes that citizens pay when they buy goods and services; an example is sales tax.
benefit-based taxes
taxes for which there is a relationship between the amount paid in taxes and services received; motor fuel taxes are a good example.
ability to pay
taxes that are not based on the benefit received but the wealth, or ability to pay of an individual.
regressive taxes
taxes that take a higher percentage of income from low-income persons.
progressive taxes
taxes that take a higher percentage of income from high-income persons.
proportional taxes
taxes that take the same percentage of income from all citizens.
tax base
the items that are subject to tax; for example, the items subject to sales tax.
tax shifting
passing taxes onto the other citizens.
tax incidence
the person actually paying the tax.
nontax revenue
governmental revenue derived from service charges, fees (tuition), lottery, and other sources.
earmarked revenue
tax revenue set aside for specific purposes; in Texas about 80 percent of revenue is earmarked.
discretionary funding
those funds in the state budget that are not earmarked for specific purposes.
income-elastic taxes
taxes that rise and fall quickly, relative to changes in economic conditions; the Texas tax system is very income-elastic.
franchise fee
major business tax in Texas that is assessed on income earned by corporations in the state.
