Question

Respond to the following in a minimum of 175 words:

Identify the main sources of revenue for and the largest expenditures made by federal, state, and local governments.

Answer 1

ans..............................

The main sources of revenue for federal,state and local governments are the Taxes.
taxation transfers wealth from households or businesses to the government. This has effects which can both increase and reduce economic growth and economic welfare.
Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent.
Direct taxes are the taxes charged by the govt. on the basis of individual's income level.They have direct bearings on the person's pocket.Indirect taxes are levied on different goods and services that are paid by the people indirectly.

Besides govt. also charge taxes like wealth and property taxes,value added taxes,toll taxes,corporate taxes etc. and receive fees and fines for providing a number of services

.In order to meet the expenses,the federal and state governments can also borrow money from a number of financial institutions and the federal government can opt for deficit financing by printing notes.For the state and the local govt.fund transfers from the federal governments to them are also one of the major sources of revenue.

Besides there are also a number of non tax receipts to the govt.that contribute to its revenue.
These revenues are mainly used for welfare for the people and the nation that are the main sources of expenditures.Budgetary allocations are made using these revenues in several areas like health,education,law & order,defence etc.that pave the path for the country's development.

About 48 percent of federal revenue comes from individual income taxes, 9 percent from corporate income taxes, and another 35 percent from payroll taxes that fund social insurance programs . The rest comes from a mix of sources.