short notes on Role of the state government
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Answer:
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Explanation:
A state government is a unit of government that specifically makes and enforces laws for a state. ... In modern nations, state governments have certain reserved powers, specific powers and responsibilities that the national government does not have.
Explanation:
Philosophique (1764)
The government has many roles in the U.S. economy. Like other businesses, the government spends and makes money, consumes goods and services, and employs people. Federal, state, and local governments raise funds directly through taxes and fees. They often borrow money from the public by selling securities, such as bonds. A bond is an investment in which people loan money to the government for a specified time and interest rate. Governments also disburse money via contracts with businesses or through social programs that benefit the public.
Finally, the federal government is a manipulator of the U.S. economy. It influences macroeconomic factors, such as inflation and unemployment, through fiscal policy and monetary policy. Fiscal policy revolves around spending and taxation. Monetary policy is concerned with the amount of money in circulation and operation of the nation's central banking system.
Funding Government Services
Governments are responsible for providing services that individuals cannot effectively provide for themselves, such as military defense, fire and police departments, roads, education, social services, and environmental protection. Some government entities also provide public utilities, such as water, sewage treatment, or electricity. To generate the revenue necessary to provide services, governments collect taxes and fees and charge for many services they provide to the public. If these revenues are not sufficient to fund desired programs, governments borrow money.
Taxation
Even before the United States became an independent nation, taxes were a significant issue for Americans. The Stamp Act of 1765 was the first tax imposed specifically on the North American colonies by the British Parliament and was strongly resisted by the colonists, who maintained that only representative legislatures in each colony possessed the right to impose taxes. The view that “taxation without representation” was tyranny contributed to the opposition to British rule that led to the Revolutionary War (1775–1783). Of course, it was necessary for the newly independent colonies to establish taxes of their own. As Benjamin Franklin (1706–1790) wrote, “In this world nothing can be said to be certain, except death and taxes” (November 13, 1789), and over the next two centuries a complex taxation code was developed at the federal, state, and local levels.
The most common taxes levied by federal, state, and local governments are:
Income taxes—charged on wages, salaries, and tips
Payroll taxes—Social Security insurance and unemployment compensation, which are paid by employers and withdrawn from payroll checks
Property taxes—levied on the value of property owned, usually real estate
Capital gains taxes—charged on the profit from the sale of an asset such as stock or real estate
Corporate taxes—levied on the profits of a corporation
Estate taxes—charged against the assets of a deceased person
Excise taxes—collected at the time something is sold or when a good is imported
Wealth taxes—levied on the value of assets rather than on the income they produce
Taxes are broadly defined as being either direct or indirect. Direct taxes (such as income taxes) are paid by the entity on whom the tax is being levied. Indirect taxes are passed on from the responsible party to someone else. Examples of indirect taxes include business property taxes, gasoline taxes, and sales taxes, which are levied on businesses but passed on to consumers via increased prices.
When individuals with higher incomes pay a higher percentage of a tax, it is called a progressive tax; when those with lower incomes pay a larger percentage of their income, a tax is considered regressive. The federal income tax is an example of a progressive tax, because individuals with higher incomes are subject to higher tax rates. Sales and excise taxes are regressive, because the same tax applies to all consumers regardless of income, so less prosperous individuals pay a higher percentage of their income.
Borrowing against the Future
Like many members of the public, government entities sometimes spend more than they make. When cash revenues from taxes, fees, and other sources are not sufficient to cover spending, money must be borrowed. One method used by government to borrow money is the selling of securities, such as bonds, to the public. A bond is basically an IOU that a government body writes to a buyer. The buyer pays money up front in exchange for the IOU, which is redeemable at some point in the future (the maturity date) for the amount of the original loan plus interest. In addition, the federal government has the ability to write itself IOUs—to spend money now that it expects to make in the future.