Tax Expenditures One typical characteristic differentiating U.S. public policy compared to Europe is that U.S. governments ofte

Tax Expenditures

One typical characteristic differentiating U.S. public policy compared to Europe is that U.S. governments often use tax incentives rather than explicit government programs to pursue particular policy goals (which include providing pensions, medical insurance, home ownership, or private investment). For example, European governments might provide larger government pensions for retirees where the U.S. might provide modest government pensions through Social Security and then encourage firms to provide additional pensions for its workers by giving tax breaks for the funds that the firms devote to their pension plans. Look at the list of tax expenditures in Table 13-1 of your text. Which do you think are more valuable than others? Why? Would public goals sometimes be better pursued through explicit government spending rather than the equivalent tax breaks? Offer examples. Respond to at least two of your classmates’ postings.

Division of Government Functions

Our federal system divides responsibilities between the various levels of government (federal, state, and local). Take a look at the government functions listed in the United Nations Classification of Governmental Functions in Appendix 6-1 of the text.

Discuss which functions you think would best be handled at the central, state and local levels and why.

Beyond determining which level of government may best handle certain functions, it is important to consider funding sources. How do you think functions at the state and local levels should be funded — through grants or own-source revenue? What are some of the advantages and disadvantages of each option? Respond to at least two of your classmates’ postings.

Required Resources

Text

Mikesell, J. (2018). Fiscal administration: Analysis and applications for the public sector (10th ed.). Retrieved from https://redshelf.com/

· Chapter 12: Revenue from User Fees, User Charges, and Sales by Public Monopolies

· Chapter 13: Revenue Forecasts, Revenue Estimates, and Tax Expenditure Budgets

· Chapter 14: Intergovernmental Fiscal Relations: Diversity and Coordination