What are the sources of revenue of local self government
Answers
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Explanation:
State and local governments collect tax revenues from three primary sources: income, sales, and property taxes. Income and sales taxes make up the majority of combined state tax revenue, while property taxes are the largest source of tax revenue for local governments, including school districts. Tax revenues fluctuate in response to changes in economic conditions and tax policies.
State and local government reliance on tax revenues vary: between 70-75 percent of local government tax revenues, including those of school districts, are sourced from property taxes. Most state tax revenues are sourced from sales and income taxes. Proceeds from these different tax levies vary, and each of these revenue sources generally responds differently to changing economic conditions. Sales and individual and corporate income tax revenue, which reflect near-term activities of consumers, workers, and firms, tend to be more immediately responsive to recessions, while changes in property tax revenue tend to lag due to differences in the timing of real estate valuations, tax assessment, and collections.
Sales and income tax revenue are highly correlated, as evidenced by their corresponding growth or decline during periods of economic expansion or contraction, respectively. Sales tax revenue is less sensitive to economic conditions due in large part to fiscal and monetary policies (i.e. provision of unemployment benefits, and changes to tax and interest rates) designed to boost or slow spending, following broader macroeconomic objectives.