Urban Sprawl

Discuss the types of taxes state and local communities implement and the necessity of these taxes. Explain how governments manage budgets when there is a lack of revenue.

State and local governments need revenue in order to provide the essential public services that the public needs and demands. Some states are fortunate that they can get revenue from sources other than personnel taxes. For the majority though, revenue is generated based on the tax burden of citizen’s personnel income.

Taxes come in various forms, with property taxes being the largest source of revenue for local governments in the United Sates (Dye & MacManus, 2012). Property tax is based upon the value of the home and property. This means the wealthier communities have the ability to generate more tax income than poorer ones. Additionally, newer homes in many states have the ability to generate more tax than older homes. This means communities, that have large amounts of growth have the ability to generate much more income than established older one.

Another form of tax for a state or local community to generate revenue with is in the form of state sales taxes. While property tax was the most important source of revenue for local communities, the general sales tax is the most important source of tax revenue for state governments (Dye & MacManus, 2012). Many states argue that with local communities utilizing property taxes and federal government not having funds to support local states, sales taxes are the only way to generate revenue. Some states get more than half their revenue from sales taxes.

Selective tax is another form of tax that states use to generate revenue. These “sin” taxes are typically involve cigarettes, gasoline and alcohol, and vary from state to state. Cigarettes and alcohol tax dollars tend to go to programs that they effect, namely health care and domestic violence shelters. The belief is that if people are addicted enough to these habits,...