Using the passage explain 3 different types of revenue. How is it collected? How is the amount determined? Is it progressive, regressive or neither? Answer should be 4-6 sentences in length.
Sources of State Revenue
Beyond the limits noted, a State can levy taxes as it chooses. The legislature decides what taxes the State will impose, and at what rates. It decides, too, what taxes localities can levy.
Sales Tax Revenue The sales tax is the most productive source of State-levied income today. It accounts for about a third of all tax monies collected.
A sales tax is a tax placed on the sale of various commodities; the purchaser pays it. It may be either general or selective in form. A general sales tax is one applied to the sale of most commodities. A selective sales tax is one placed on the sale of only certain commodities.
In 1932, Mississippi became the first State to levy a sales tax. Today, 45 States do so. The rates range from 2.9 percent in Colorado to as much as 7.5 percent in California; most States now peg the rate at between 5 and 7 percent. Some things are exempted from the tax almost everywhere—most commonly, food, medicine, and newspapers. A growing number of cities, and some urban counties, also levy sales taxes today—a “piggy-back tax,” added on to and collected with the State tax.
All 50 States impose a selective sales tax on gasoline, alcoholic beverages, cigarettes, and insurance policies. Many of them also place selective sales taxes on such things as hotel and motel accommodations, restaurant meals, and theater and other amusement admissions.
Sales taxes are widely used for two major reasons: They are easy to collect, and they are dependable revenue producers. Yet a sales tax is a regressive tax—that is, it is not levied according to a person's ability to pay. The tax falls most heavily on those least able to pay it.
Analyze Maps What generalization can you make about the States with the highest gasoline taxes?
States are prohibited from collecting the sales taxes on most Internet purchases. That is because products made in one State are sold online to customers across the country. As more and more people shop via the Internet, the States complain that the drain on their sales tax receipts could very well lead to a reduction of public services and/or an increase in their sales tax and other tax rates. In 2007, Congress, acting under its commerce power, put a seven-year moratorium on State taxation of e-commerce.
Income Tax Revenue The income tax, which is levied on the income of individuals and/or corporations, yields a quarter of State and local tax revenues today. Wisconsin enacted the first State income tax in 1911. Today, 43 States levy an individual income tax; 46 have some form of corporate income tax.
The individual income tax is usually a progressive tax—that is, the higher your income, the more tax you pay. Income tax rates vary among the States, from 1 or 2 percent on lower incomes in most States to 9 percent or more on the highest incomes in a few States. Those who pay the tax receive various exemptions and deductions in calculating their taxable income.
Corporate income tax rates are usually a uniform (fixed) percentage of income. Only a few States set the rates on a graduated basis.
The progressive income tax is held by many to be the fairest—or the least unfair—form of taxation, because it can be geared to a person's ability to pay. If the rates are too high, however, the tax can discourage individual enterprise.
Property Tax Revenue Property taxes have been a major source of governmental revenue since the early colonial period. Once the major source of State revenue, they are now levied almost exclusively at the local level. They provide roughly three-fourths of all local government tax income today.
A property tax is a levy on (1) real property, such as land, buildings, and improvements that go with the property if sold; or (2) personal property, either tangible or intangible. Tangible personal property is movable wealth that is visible and the value of which can be easily assessed—for example, computers, cars, and books. Intangible personal property includes such things as stocks, bonds, mortgages, and bank accounts.The process of determining the value of the property to be taxed is known as assessment. An elected county, township, or city assessor usually carries out the task.
Supporters of the property tax argue that, because government protects property and often enhances its value, property owners can logically be required to contribute to the support of government.
hey note that the rate at which the tax is levied can be readily adjusted to meet governmental needs.
Critics insist that the property tax is not progressive, not geared to one's ability to pay. They also argue that it is all but impossible to set the value of all property on a fair and equal basis. Finally, they say that personal property is easily hidden from assessors.
Inheritance or Estate Tax Revenue Every State has some form of inheritance or estate tax, sometimes called the “death tax.” An inheritance tax is levied on the beneficiary's (heir's) share of an estate. An estate tax is one levied directly on the full estate itself.Business Tax Revenue A variety of business taxes, in addition to the corporate income tax, are important sources of revenue in most States. More than half the States impose severance taxes, which are levies on the removal of natural resources such as timber, oil, minerals, and fish from the land or water.
Every State has various license taxes that permit people to engage in certain businesses, occupations, or activities. For example, all States require that corporations be licensed to do business in the State. Certain kinds of businesses—chain stores, amusement parks, taverns, and transportation lines—must have an additional operating license. Most States also require the licensing of doctors, lawyers, hairdressers, plumbers, electricians, insurance agents, and a host of others.
Many States have levies known as documentary and stock transfer taxes. These are charges made on the recording, registering, and transfer (sale) of such documents as mortgages, deeds, and securities. Some States also impose capital stock taxes, which are levied on the total assessed value of the shares of stock issued by a business.
Other Tax Revenues A variety of other taxes are imposed by the States and their local governments in order to raise revenues. As a leading example, payroll taxes produce huge sums; the monies generated by those taxes are held in trust funds to pay unemployment benefits, accident insurance, and retirement programs. Most States levy amusement taxes for admission to theaters, sports events, circuses, and the like. Every State imposes license taxes for various nonbusiness purposes—notably, on motor vehicles and drivers, and for such things as hunting, fishing, and marriage.Nontax Revenues Taxes have never been very popular, and so State and local officials have long looked for nontax revenue sources. Today, the States and their many local governments take in more than $2 trillion a year from these sources. Much of that huge amount comes as grants from the Federal Government.
Business enterprises and user fees. State and local governments also make money from a variety of publicly operated business enterprises. Toll roads and bridges are especially popular in the East. Several States, notably Washington, are in the ferry business. North Dakota markets a baking flour, sold under the brand name “Dakota Maid,” and is also in the commercial banking business. Eighteen States are in the liquor business, selling alcohol in State-operated stores.
Many cities own and operate their water, electric power, and bus transportation systems. Some cities run farmers' markets; rent space in their office buildings, warehouses, and housing projects; and operate dams and wharves. Receipts from such businesses support the local governments that own them. Other nontax sources include court fines, sales and lease of public lands, and interest from loans, investments, and late tax payments. Among the many public services for which those who use them must now pay a fee are hospitals, airports, parks, water, sewers, and garbage disposal. Lotteries. For many years, nearly all forms of gambling were outlawed in every State except Nevada. Most States have relaxed their anti-gambling laws, hoping to attract dollars, jobs, and tourists. Today, only Hawaii and Utah do not permit any kind of gambling.
State-run lotteries net some $19 billion per year for 43 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Lotteries provide revenue without raising taxes. Supporters note that they are popular, voluntary, and offer an alternative to illegal gambling. Opponents say that lotteries prey on the poor and encourage compulsive gambling.
Lottery proceeds are used for a number of purposes among the States. About half of the States with lotteries earmark all or most of their revenue for education. Some channel the money directly to the State's general fund, while others dedicate most of it to economic development or a wide range of other uses.
Borrowing Funds The States and many of their local governments regularly borrow money to pay for such large undertakings as the construction of schools, highways, hospitals, sports facilities, and college dormitories. Much of that borrowing is done by issuing bonds, much as the Federal Government does. Generally, State and local bonds are fairly easy to market because the interest paid on them is not subject to State or federal income taxes.
At various times in the past, many State and local governments defaulted on their debts. Thus, most State constitutions now place quite detailed limits on the power to borrow. Altogether, the 50 States' debts now total about $5.1 trillion and local governments owe more than $1.8 trillion.
A public budget is much more than bookkeeping entries and dollar signs. It is a financial plan, a plan for the control and use of public money, public personnel, and public property. It is also a political document, a highly significant statement of public policy. In the State budget, the State's leaders establish their State's priorities and decide who gets what, and who doesn't.
The Budget Process in the Past For more than 150 years, State budgets were the product of haphazard and uncoordinated steps centered in the legislature. Various State agencies appeared before legislative committees, each seeking its own funding, often in fierce competition with one another. Their chances of success depended far less on need or merit than on whatever political muscle they could bring to bear.
Three different types of revenue mentioned in the passage are sales tax revenue, income tax revenue, and property tax revenue. Sales tax revenue is collected by placing a tax on the sale of commodities, with the purchaser paying it. The amount collected is determined by the rate set by the legislature and is regressive in nature. Income tax revenue is collected by levying a tax on the income of individuals and/or corporations, with higher income earners paying more tax. The amount collected is determined by the rates set by the legislature and is usually progressive in nature. Property tax revenue is collected by imposing a tax on real or personal property, with the process of assessment determining the value to be taxed. The amount collected is determined by the rate set at the local level and is not progressive.
Reflect on the doctrine on Unit 3 Lesson 5 Slide 3. Who did this impact? What did this provide a justification for? Continue on Slide 4 to identify what case reversed this decision. Answer should be 5-7 sentences in length.
Slide 3:
After Reconstruction, the Southern states passed a number of laws aimed at reducing the rights of African Americans and keeping them separated from white people. These laws came to be called Jim Crow laws. (Jim Crow was a clownish and demeaning African American character who was popular at the time.) In 1890, Louisiana passed the Separate Car Act, a law that required railroads to provide “equal but separate accommodations for the white and colored races” and made it illegal for anyone to sit in a place that was reserved for members of the other race.
A group of black Louisianans formed the Citizens' Committee to Test the Constitutionality of the Separate Car Act. A 30-year-old shoemaker named Homer Plessy agreed to be arrested. He looked white but was legally classified as black.
On June 7, 1892, Plessy bought a train ticket and sat in the car reserved for whites. He then told the conductor that he was black. The conductor told him to move to the “colored” car, but Plessy refused. As he was required to do by the law, the conductor called the police and had Plessy arrested.
Plessy was brought up in front of Judge John Ferguson. In an earlier case, Ferguson had ruled that the Separate Car Act was unconstitutional if it was applied to interstate train travel. Plessy contended that the law was unconstitutional even when applied to travel within Louisiana. Ferguson ruled that it was constitutional, and sentenced Plessy to pay a fine or go to jail. Plessy petitioned Ferguson to overturn his decision based on the unconstitutionality of the law.
The Case
Plessy argued that the Separate Car Act violated the Thirteenth and Fourteenth Amendments. The Thirteenth Amendment banned slavery, while the Fourteenth Amendment recognized all citizens of the United States as equal.
Thirteenth Amendment
Section 1
Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Fourteenth Amendment
Section 1
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge [reduce; lessen] the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
Plessy described segregation as a “badge” of slavery or servitude, violating the Thirteenth Amendment. He also said it abridged the privileges of African American citizens and deprived them of liberty, both in violation of the Fourteenth Amendment.
The Ruling
By a 7–1 majority (one justice did not participate), the Supreme Court ruled that the Separate Car Act did not violate the Thirteenth Amendment because it did not reestablish slavery, and segregation does not serve as a badge of slavery. Justice Henry Brown’s majority opinion relied on a Supreme Court decision from 1883 to conclude that acts of discrimination by an individual or business do not impose a badge of slavery or servitude. That earlier ruling said a segregation law might violate the Fourteenth Amendment but did not violate the Thirteenth.
However, Brown continued, the Louisiana law did not violate the Fourteenth Amendment, either. He admitted the law created and promoted social inequality but said that social equality was not protected by the Constitution. The Fourteenth Amendment only protects legal equality, and as long as the accommodations and facilities for blacks and whites are equal, neither group is being discriminated against.
Slide 4:
Brown v. Board of Education (1954)
Background
The 1896, the Supreme Court decision in Plessy v. Ferguson established that segregated facilities were permissible if the accommodations for blacks and whites were equal. In the 1930s, the National Association for the Advancement of Colored People (NAACP) began a long-term campaign to get the Plessy decision overturned.
The NAACP decided to aim its attacks at segregated education. It won a series of cases in Maryland, Missouri, and Texas involving black students who were not allowed to enroll in whites-only law schools. In each case, law schools for African Americans were either nonexistent or inferior to the white schools. The courts ruled that, because the facilities were not equal, they could not remain separate.
Under Kansas law at the time, cities were permitted, but not required, to maintain separate schools for different races. The city of Topeka had segregated elementary schools, although the junior high and high schools were integrated.
Linda Brown was an African American third-grader in Topeka. Every morning, she and her little sister had to walk through a dangerous railroad yard in order to get to the bus that took her to the “colored” school. Her mother tried to enroll her in a different school much closer to home, but was not allowed to because that school was for whites only.
Brown’s father sued the board of education, arguing that its policy violated Linda’s rights under the Fourteenth Amendment. A federal court found that segregation was harmful to black children, but because of Plessy v. Ferguson, the court said it could not order schools to be integrated. NAACP attorney Thurgood Marshall appealed to the Supreme Court.
The Case
The Court combined four other school segregation cases from different parts of the country with Brown v. Board of Education of Topeka Kansas and gave that name to the combined cases.
Thurgood Marshall conceded that white and black elementary schools in Topeka were substantially equal—they had similar buildings, buses, teachers, etc. Yet, even if the facilities were equal, he said, the segregation made them unequal. He supported the argument with studies showing that African American students in segregated schools had lower self-esteem and performed more poorly than African American students in integrated schools.
The lawyer for the Board of Education replied that none of the studies had been carried out in Topeka, so there was no evidence that segregation was detrimental to Topeka students. He further argued that, whether segregation was harmful or not, it was constitutionally supported by the decision in Plessy v. Ferguson.
The Ruling
After the Court heard the case in 1952, it was clear that a majority of the justices wanted to reverse Plessy v. Ferguson. However, the justices were not united in their interpretations of how to apply the law to the case. In the spring of 1953, the court recessed without rendering a verdict. Instead, it announced it would rehear some of the arguments the following December.
During the summer, Chief Justice Fred Vinson died. California Governor Earl Warren was named the new Chief Justice. After the December rehearing, Warren was able to convince all the justices to agree on the reasoning for overturning Plessy.
In the opinion, Warren conceded that the Fourteenth Amendment was not originally intended to prohibit school segregation. In the 1860s, public schools did not exist throughout the country, and many children received little or no education. However, Warren wrote, by the middle of the twentieth century, public education had become an essential part of each child’s personal, civic, and professional development. The court declared that, under the Equal Protection Clause of the Fourteenth Amendment, segregated public schools are inherently unequal and therefore forbidden by the Constitution.
Plessy v. Ferguson (1896) Brown v. Board of Education (1954)
Homer Plessy believed a Louisiana law, the Separate Car Act, violated the Thirteenth and Fourteenth Amendments to the Constitution, because it required white and black passengers to sit in different cars on a train.
The Supreme Court ruled 7–1 that the Separate Car Act did not violate the Thirteenth Amendment because segregation was not a “badge of slavery.” The court also ruled that, even though segregation created and promoted social inequality, the Fourteenth Amendment only protected legal inequality.
The ruling established the separate but equal doctrine, which supported Jim Crow laws around the country.
Linda Brown’s parents sued the board of education in Topeka, Kansas, claiming that segregated schools violated the Fourteenth Amendment.
The Supreme Court ruled unanimously in favor of Brown. The court said that segregated school facilities did violate the Fourteenth Amendment. Even if the schools were deemed equal to each other, the act of separation itself violated the Equal Protection Clause of the Fourteenth Amendment.
The ruling in this case reversed the decision in Plessy and led to future cases that outlawed segregation in other public facilities such as bus stations and restaurants.
Three different types of revenue discussed in the passage are sales tax revenue, income tax revenue, and property tax revenue. Sales tax revenue is collected by placing a tax on the sale of various commodities, and the purchaser pays it. The amount collected depends on the rate set by the legislature, and it is collected at the point of sale. Sales tax is considered regressive as it falls most heavily on those with lower incomes.
Income tax revenue is collected by levying taxes on the income of individuals and/or corporations. The amount collected is determined by the income tax rates set by the legislature, and it is collected through the process of filing tax returns. The income tax is usually a progressive tax, meaning that higher-income individuals pay a higher percentage of their income in taxes.
Property tax revenue is collected by levying taxes on real and personal property. The amount collected is determined through the assessment of the value of the property, which is carried out by elected assessors. Property taxes are collected at the local level and contribute to local government tax income. Property taxes are often criticized for being regressive, as they are not necessarily based on a person's ability to pay.
In summary, sales tax revenue is collected at the point of sale, income tax revenue is collected through tax returns, and property tax revenue is collected through property assessment. Sales tax is regressive, while income tax is usually progressive, and property tax can be either progressive or regressive depending on the local assessment and rate.
Three different types of revenue mentioned in the passage are sales tax revenue, income tax revenue, and property tax revenue.
Sales tax revenue is collected by imposing a tax on the sale of various commodities, and the purchaser pays it. The amount collected depends on the rate set by the legislature, which varies from state to state. Sales tax can be either general or selective, with the former applied to most commodities and the latter applied to specific ones. Sales tax is regressive because it falls most heavily on those least able to pay.
Income tax revenue is collected by levying a tax on the income of individuals and corporations. The amount collected is determined by the individual's or corporation's taxable income and the tax rates set by the state. Income tax can be progressive, with higher-income individuals paying a higher percentage of their income as tax. However, some states have fixed rates for corporate income tax, making it neither progressive nor regressive.
Property tax revenue is collected by levying a tax on real or personal property. The amount collected is determined by assessing the value of the property. Property tax is mainly levied at the local level and provides a significant portion of local government tax income. Property tax is considered regressive because it is not based on a person's ability to pay.
In summary, sales tax revenue is collected from purchasers, income tax revenue is collected from individuals and corporations based on their income, and property tax revenue is collected based on the value of property. Sales tax is regressive, income tax can be progressive or neither, and property tax is regressive.