Fiscal Policy Flashcards
Sin Taxes
A tax on an item or behavior that is unpopular or a tax on a product that state seeks to reduce the consumption of (i.e. gas, tobacco product, and alcohol)
Expeditures
Money spent by government
Discretionary spending
Spending controlled in annual appropriations acts
Medicaid
A joint state and federal health insurance program that serves low-income mothers and children, the elderly, and people with disabilities
Fiscal Federalism
The system by which federal grants are used to fund programs and services provided by state and local governments
Temporary Assistance for Needy Families (TANF)
created by Congress in 1996 to replace Aid to Families with Dependent Children, a social welfare program that provides monthly cash assistance (up to four years) to means-tested poor families with children under the age of 18: it requires recipients to participate in a work activity
Operating Budget
The part of a state’s budget dedicated to paying for current operations, such as public services and public employee salaries
Capital Budget
The portion of state spending on infrastructure such as buildings, bridges, and roads. Capital budgets may be exempt from balanced budget rules
Balanced Budget Rules
A requirement that a state’s budget has revenues equal to spending. Rules may apply to projected revenues and spending, or to actual levels
Regressive Tax
Poorer individuals pay a greater share of their income to taxes
Progressive Tax
The wealthier people pay a larger proportion of their income to cover the tax
Flat Tax (11 states)
Everyone pay the same income tax rate
Graduated Income Tax Rate (30 states)
Pay a different percent of income tax based upon how much money you make
Sales Tax
Taxes levied by state and local governments on purchases
User Fees
A direct charge for use of a service, charged to the user of the service (i.e. tuition and hospital charges)
