Periods of Government
It is right after the Great Depression, the economy is struggling to overcome this hurdle and get back on it's feet. Congress just passed the Revenue Act this past year (1932). Sarah saw the government as a "guardian" and "protector" of the US. They came in the time of need by providing income to the disabled and elderly, they put American labor back to work, they ensured quality education, civil rights, and a clean environment. They also defended against existential threats of Axis Power, Communism, and nuclear annihilation. There are new national standards and criminal, social and marketplace policies put in place. New federal taxation and federal spending leading to deficits. Federal government started encroaching on states power.
Federal Government Era
What are the three forms of government and where is the power concentrated in each?
Unitary - central government
Confederacy - state government
Federal - both central and state government
What are the differences between private and public goods?
Public Goods - non-excludable and non-rivaling
- there are merit public goods - should not be denied to people who cannot pay for them (public education, transportation, healthcare)
Private goods - are excludable and rivaling
Who are the primary users of property, sales, and income tax and rank them by the highest revenue probability
1. Property (Local Governments)
2. Income (Federal Government)
3. Sales (State Governments)
Do governments borrow money to achieve equity?
yes! All governments borrow money and business do the same. Borrowing shifts costs from "pay as you go" to "pay as you use"
It's the year 1790 and Paul lives in a small rural town in the United States. He travels from state to state with his Dad working in the family farming business. One day a county official came up to record their property with the state. Paul had never seen a government official before and he knew the common attitude about them. His dad always told him "the best government is the least government." They want to keep things as they are in their small, rural town. What time period of government is Paul living in?
No-Government Period
Name the governmental primary responsibilities: federal, state, and shared (which areas of the state require federal involvement)
Federal - national defense, space program, postal service
State - education, highways & transportation, health, sanitation, fire, police
Shared - welfare, employment services, unemployment compensation
What does the projected flow of major revenue do and tell us?
Tells us the expected revenue for a state in that given year to help make the budget. The comptroller makes this. It includes the ESF (Economic Stabilization Fund - "rainy day fund"). It also tells how much overrun occurred that needs to be paid off with the upcoming years revenue.
What is normative language when it comes to taxes?
"what should be" language (this is right, this is wrong, this is too much, or this is too little)
Based on the Average State and Local Government Expenditures (2013) pie chart, what are the largest components and some of the bigger categories?
The biggest expenditure is education (26%), the second largest is social services and income maintenance (23%). Some other big categories include transportation, hospitals, public safety, housing and environment, utility expenditure, government administrations, and insurance trust
Tom is a citizen in Chicago in 1897. He noticed their was the implementation of something called Dillon's rule by the Supreme Court in 1895. He had a vague idea of what it was but he didn't understand what it did. Everything is changing, elections are now non-partisan, municipal hires are under civil service, school districts are being separated from the municipal government (this made them independent school districts). Tom's party machine was still working hard because he was in Mayor Daley's political machine. What governmental period is this?
State-Intercity Government Period
Name the similarities between the U.S State Constitutions and the U.S. Constitution.
- both have separation of powers (executive, legislative, and judicial branches)
- both have checks an balances written in
- both have a bill of rights
- both set the laws of the land
What does GDP stand for? What does it measure and what does it not measure?
Gross Domestic Product - all products/services created/provided domestically
Tells us the size, health, and power of an economy of a nation (... or state)
Does not measure the economic health of individuals
How does taxation work (give me the pieces and the formula, along with the definition of the pieces.)
Tax Bill = (base) x (rate) , Tax Burden = (Tax Bill) / (Total Value)
Tax Base = The item/amount subject to taxation (but usually not entire value/amount)
Tax Rate = The percentage set by legislature (for states)
Tax Bill = Taxes paid in a year by a person or business
Total Value = Total income, total value of property, etc.
Tax Burden = A measure that takes the tax bill of a person or corporation and folds in consideration of their ability to pay
What are the different ways Texas law enforces budgetary discipline on government spending?
John recently moved to the city due to the thing called the "industrial revolution." He noticed a lot of urbanization and immigration happening in the cities. This large influx of people caused a lot of problems and the government had to step in. They had to provide large-scale services such as water, sewage, waste, crime, education, and health and building codes. This led to government growth, but it also led to a lot of corruption in the government. Things like political machines started popping up that fed on patronage, bribes, and gifts to get what they want. What time period of government is John living in and what is the time frame of this government? What are political machines and what were their methods?
Municipal Government Period (1850-1895)
Political machines are leaders in gov. that built networks to build and retain power
Deeper Discussion - was this government period all bad?
Name the differences between the U.S. State Constitutions and the U.S. Constitution. (specifically Texas)
State constitutions tend to be longer (shortest one in NH), there is no federalism between states and there localities like with national and state, states may have specific rights no mentioned in US Constitution, US Constitution is more flexible in its interpretation
Texas Constitution - very long, poorly organized, strongly conservative, reaction to carpetbag rule, contains a lot of "deadwood"
What are the most common sources of revenue in a state
taxes, federal grants, fees and licenses, interest on investments, direct sales, borrowing, gambling/lottery
What is the base, rate, incidence, and revenue predictability of income, property, and income taxes?
Income - (Base)personal or corporate income subject to taxation, (Rate) progressive, (Incidence) widely accepted as progressive, (Revenue Predictability) moderate
Sales- (Base) sales subject to taxation; varies by state, (Rate) fixed, (Incidence) regressive, (Revenue Predictability)low
Property - (Base)property subject to taxation, (Rate) flat; fixed, (Incidence) regressive, (Revenue Predictability)high
Bases on the table comparing 2003 spending to 2014 spending, what area did Texas spend more money and rise in the rankings. What do the trends we see in this comparison across all areas tell us about Texas's spending habits?
Education is the only area we significantly put more money in.
Texas is a low tax, low spend state and that shows in their rankings compared to other states.
The government has recently had a devolution of power, where more power is going back to the states. They have done this by using block grants to give money to the states allowing them some flexibility about what it is used for. This time period holds the belief that individuals make better decisions than institutions and businesses make better decisions than the government. It is believed government closer to the people was better than a distant government. Some problems faced in this period are the private sector is superior to the public sector, less government is preferable to more government, and state and local governments make better decisions than the federal government. What governmental period is this?
New Federalism
What are the CATO Institute's 8 Reasons to Cut Federal Aid to the States?
1. No magical source of federal funds
2. Grants spur wasteful spending
3. Aid allocation doesn’t match any consistent idea of need
4. Grants reduce state policy diversity
5. Grant regulations breed bureaucracy
6. Grants cause policymaking overload
7. Grants make government responsibilities unclear
8. Common problems are not necessarily national priorities
What trends were shown and talked about for the Texas Total Revenue from 2006-2015 chart?
You can see the spending increased in 2008 in state taxes. Federal funds increased from 2008-2009 to 2010-2011.
Based on the video showed in class what does the distribution of wealth look like in the United States, specifically the differences between what Americans think the distribution looks like, what their ideal distribution would look like, and what it actually is.
Americans think the distribution has the middle class having a decent chunk of the wealth in America, their ideal curve would have the top 1% are only 10-12% ahead of those in the poorest income bracket, and the actual distribution shows the poorest income groups not even registering and the top 1% has over 50% of the wealth in the US. In the actual the middle class is only about 7% above the lowest class.
What do high levels of local debt tell us? From both the state and local perspective?
From the state perspective they view the localities as poor fiscal managers and that they are taking unnecessary and excessive risk for residents.
From a local government's viewpoint debt is absolutely necessary to provide real needs and debt is low risk (almost "free money") due to extremely high interest rates at present time, they view debt as inevitable