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At the federal level, the two categories of budgetary expenditures are entitlement and discretionary spending.
Government budgets reflect the priorities of policymakers. They specify what programs and activities the government will support and how to raise the money needed to fund them.
Taxes play an essential role in the functioning of modern society. Their primary goal is to fund government operations. But their role goes well beyond that.
Block grants and unfunded mandates are two government budgetary practices that can have significant implications for lower levels of government.
Federal and state governments have tried to change budget rules to control government spending. Budget rules have also been used to impose fiscal discipline.
Under the U.S. Constitution, people are entitled to compensation when a government takes their property. This is known as a taking.
How to improve the tax code is the subject of much debate. Proponents of reform often call for increasing fairness and simplicity. But people define those concepts in different ways.
Policymakers use the tax system to raise revenue and to promote social policy goals. For example, tax breaks may be provided to encourage home ownership.
Most states and localities generate a significant portion of state and local revenue from the taxation of retail sales. Such taxes are attractive because they are relatively easy to administer.