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Essay On Fiscal Policy In Texas

Decent Essays

Option No.1: Fiscal Policy - Texas Tax System

First of all, both options for this discussion are very interesting but I chose option number one to study and analyze because I am always curious about taxation. I always ask myself out of curiosity about why there are differences in tax implementation and system in America specifically in each State? For me to better understand this topic, I have researched about the terminologies, the process and the ideas that go along with this subject matter. What is Fiscal Policy?“It refers to the central government's policy on lowering or raising taxes or increasing or decreasing public expenditure in order to stimulate or depress aggregate demand”(Bloomsbury Business Library). This means the ability …show more content…

Notice that Texas State does not have state income tax? It is because their revenues are coming from other tax categories like sales tax and property tax. “When the state increases its reliance on sales taxes to offset the holes punched into the budget by corporate, this increases the overall tax burden on the poor and the working-class”(Dollars and Sense 12). Compared to other states like that of California which implements progressive tax system (collects more revenues from state income tax), Texas does not levy on state income tax. “The lack of an income tax means that the Tennessee State government relies to a large degree on sales taxes to raise revenues”(Dollars and Sense 12). Texas, like Tennessee, belongs to regressive tax states but Texas gets more of its revenue through property tax rather than sales tax. “Depending on the methods used and what is included, Texas sometimes looks pretty good on the surface, with a lower overall burden than many places”(Perryman 30). In my personal opinion, I think Texas should stick to its present tax system and I believe that other states should adopt what Texas tax system have. “Many states have income taxes, which Texas, of course, doesn’t have”(Perryman 30). Although regressive tax system may seem unfair to some but if looking at the big concept it is still fair because as per my experience Texas wage bracket

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