Passing the Budget
One of the most important aspects of government is the budget. You are probably familiar with what a budget does when you think of your own personal budget. A government budget has the same purpose and is basically a plan of how a government intends to run the country for a year. A budget will also define which sources of revenue a government has access to and in which areas it intends to spend money. But how do budgets work, who creates them and what aspects of purchasing and spending do they address?
Firstly, let's look at the basics. In its simplest form, a government budget is a legal document that sets out how the country will operate. It will outline the types of revenue the government can collect from individuals and companies in the form of taxes. For example, income tax and corporate tax may be the basis of a federal government's income, while sales tax and property tax will fund spending at state level. The budget will also deal with expenses and outline the areas where the government intends to invest money such as in health, education and social welfare.
The contents of a country's budget are influenced by several factors including economic and political considerations. Political interests play a large part because different groups within society will attempt to influence the budget by lobbying the decision-makers. If you are part of a group that wishes to avoid tax burdens, you may seek to influence this area of the budget. If your aim is to get more funding for a specific group, for example, for single mothers, you will also want say. For this reason, government budgets are usually controversial because it is impossible to satisfy the interests of everyone in a community.
A government budget in the U.S is prepared by the Office of Management and Budget. It is then submitted to Congress for consideration, which is usually a lengthy process because of people's different interests. Eventually, once the budget has been agreed upon by Congress, it is approved by the chief executive and implemented by the government.
For more infomation on government finance choose from the list below. |
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Banking - Business Finances - Economics - Insurance - Investing
Major Purchases - Personal Finances - Stock Market - Taxes
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