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Balancing taxes with government funding needs

Updated on January 28, 2014

It is understandable that governments need funds to accomplish their responsibilities according to the Constitution of the country or to their respective state but how much do they really need. While this is a well-known fact the amount of funding necessary needs to be examined. States and the federal government each have specific responsibilities and must have the funds necessary to satisfy these responsibilities.

The income producer for the federal and state governments is taxes of one form or another. Today at the federal government level there seems to be a need to constantly increase the deficit to fund what has become a controlling philosophy rather than a support function for the states. In the beginning of our country the purpose of the federal government in large part was a support function to the respective states not the controlling function it appears to be today. There have been increasing battles on issues which several states feel are their responsibilities not the federal government and there are or have been court battles to address this disagreement. Some have been won by the states, some by the federal government and some are yet to be decided.

There are many functions identified within the Constitution for which the federal government must enforce and/or provide the laws and regulations consistent with the Constitution. Taxes currently in place are not enough to fund all the activities which the federal government is currently involved and as a result our deficit is soaring. Taxes are supposed to be the means to fund government responsibilities and provide some excess to address funding shortfalls when disasters such as hurricanes and tornados occur.

One of the problems which I feel needs to be addressed is the allocation of funding to the various departments and agencies within the federal government. There are always going to be times when departments or agencies do not have enough funding or have excess funding depending on their responsibilities. One example involves the Federal Emergency Management Agency. You can never fully prepare and know what disasters this agency will be required to be involved in from one year to another and as such the funding may not be enough to satisfy their responsibilities. This is where the allocation process needs to be changed if there is no option to take funds from one agency and allocate them to another.

Taxes in this economy are one of several issues which will have some focus with the mid-term elections in November. Specifically there are taxes collected such as federal and state taxes on gasoline which should be used to fund any highway construction or repair projects. These taxes should be specifically used for this purpose. This is not meant to imply that these taxes are not being utilized in this fashion but the infrastructure of our country is in bad need of repair. Some bridges are in a bad state as far as safety and the fact they are handling a volume of traffic for which they were not designed.

Balancing the need for the required tax income and other income options which may be in place to satisfy state and federal government requirements is I admit a difficult task to achieve. Achieving a balance between income and expenses is something which the federal government must address if our economy is ever going to be vibrant again. In respect to funding for state governments they are required to have a balanced budget whether it is a requirement of a federal law or their state Constitution makes no difference. It should not take a balanced budget amendment to the Constitution to balance income with expenses. It is a matter of prioritizing the needs of the country and the commitment to each and every citizen through government programs or benefits which they were promised. Two examples which come to mind are Social Security and Medicare. Funding for these two programs are projected to have shortfalls if something is not done to address the problem. It is a matter of balancing taxes and expenses.

Expenses of the federal and state governments also involve the costs of monitoring or enforcing regulations generated as a result of laws passed. Expenses can be reduced, which lowers the need for tax or other income if regulations that are an overreach of the federal or state government are revised or eliminated. This in effect means that interpretations of laws enacted do not necessary match the intention of the laws as written. Granted there are more than likely many regulations which are well within the constitutional authority either of the applicable laws or the applicable Constitution.

Many laws are passed by Congress and state legislatures and the income being received at the state level have differences. Some have no income tax but they still maintain vibrant economy without jeopardizing business expansion and unemployment rates. The federal government quite possibly could learn much from the states with regards to established taxes and income alternatives.

The funding needs of government at the federal and state levels along with their responsibilities are different and the options each has are also different. States have learned to balance their budgets with the tax revenue they receive and in many cases they have difficult decisions just like the federal government. The needs of each state must be met with the income they are receiving and the needs of the federal government should be met with the income they are receiving.

Governments at the state and federal levels must change the spending culture to ensure the needs of all citizens are met as identified in the applicable Constitution. Governments should not take on more funding issues unless it directly relates to their responsibilities. As it appears at this point there are increased programs related to constitutional authority which may far exceed the intended actions when the Constitution was first written. This also can apply to state governments in that program expansions may also not be necessary to the level they occur. Trying to address every issue by throwing money at it increases the need for revenue. Government at any level cannot solve all the problems with money. Fiscal responsibility needs to be incorporated at all government agencies and departments whether they are at the state or federal level makes no difference.

It is important to address constitutional responsibilities but it is also important to address them wisely. Creating programs or regulations to address every possible situation is an impossible task as you can never know what will happen from one year to another. Government programs and regulations costs money and the more there are the more income is needed to fund them. Programs and regulations should only be in place to address direct responsibilities as identified in the Constitution. Expanding the scope of specific responsibilities without a direct connection to the Constitution is the problem we have today. Creating initiatives and connecting them in the broadest possible way does not mean that every program or regulation in existence at the state and federal level are justified. Monitoring programs and enforcing regulations costs money, the more they increase the more government becomes bigger and the appetite for money becomes bigger. The culture of constantly increasing our national debt to fund the federal government must be changed. Let us hope that those we elect to represent us this election year will have more common sense in the way they spend our tax dollars.


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