Question

Patterns and structure of revenue for state and local government are important policy concerns because they establish who will pay for public services. Revenue revision can begin only with a clear understanding of where revenue policy leaves the state and its localities now and what available options have not been selected. Furthermore, it is useful to understand what conditions are like in surrounding areas. Evidence for such discussions can be drawn from sources such as the Department of Commerce’s Survey of Current Business (monthly); the Bureau of Economic Analysis; the Census Bureau’s Census of Governments (quinquennially), Governmental Finances (annually), and State Tax Collections (annually); and state tax handbooks published annually by Research Institute of America (RIA) and Commerce Clearing House (CCH). You can find valuable data at the Bureau of Economic Analysis (www.bea.gov) and Bureau of Census (www.census.gov) websites. From those and similar sources, prepare answers to these questions about the revenue system in your state:

a. How does the burden of state, local, and state-local taxation in your state compare with that of the nation and region? (Comparisons are often made as percentages of state personal income and per capita income. What is the logical difference between the two measures?) State and local tax collections for each state are available at the website of the U.S. Bureau of Census (www. census.gov); look under the section labeled “Public Sector.” How does the local share of state and local taxes compare?

b. Prepare an estimate of the relationship between business and individual tax shares for your state. How do you decide what is a business tax and what is an individual tax?

c. How rapidly have state and local taxes grown in your state during the past five years? Is that faster or slower than growth in state personal income and the rate of inflation? Have there been tax increases (decreases) affecting that growth?

d. What are the major revenue sources used by governments in your state? How does relative use of those sources compare with the nation and the region? Does your state have any major taxes not common to other states (severance, business and occupation, local income, etc.)? Are some typical taxes not used?

My state is Arkansas. Please provide the website address for each question.

Answer 1