Question

In: Economics

what proportion of the Texas budget consists of federal funds? How might the presence of this...

what proportion of the Texas budget consists of federal funds? How might the presence of this federal money affect the relationship between the state and federal governments?

Solutions

Expert Solution

Dear Student,

Belwo are the answer to your question

Introduciton

Federal funding plays an essential role in state finances, supporting a variety of programs and services.

In fiscal 2016, for instance, nearly 20 percent of federal tax dollars went directly to state governments as grants to pay for programs in education, health care and infrastructure

Abstract

Texans sent the federal government $261 billion in taxes in 2016, and the state government received $39.5 billion in grants in return, or about 15 percent of our total federal tax tab.

As per the office of Management and Budget (OMB), the federal government received more than $3.2 trillion in total taxes in 2016. Of that, $1.5 trillion or 47 percent came from personal income taxes, which in 2018 are expected to comprise more than half of all federal revenue for the first time in our nation’s history.

After taxes are collected, they’re appropriated to various federal agencies, some of which then allocate funding to individuals and state and local governments.

The largest share of federal aid represents direct payments to individuals for Social Security, disability, Medicare, unemployment compensation and other programs. But these payments don’t flow through state governments.

B) Presence of fedral money and its affect on government

Most government money comes from: Collecting taxes, or revenue, from people and businesses. Borrowing it by selling Treasury securities (savings bonds, notes, and Treasury bills

In the United States, the government operates under a principle called federalism. Two separate governments, federal and state, regulate citizens. The federal government has limited power over all fifty states. State governments have the power to regulate within their state boundaries.

one way that the federal government can influence the states is through the distribution of grants, incentives, and aid. State and local governments are eager to obtain federal dollars, but many of those dollars come with strings attached

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