Economics of State and Local Governments Research Paper

Economics of State and Local Governments - Research Paper Example ative inflation period during the same period, which stood at 9.06 percent, calculated by using consumer price indices for January 2013 and January 2009 (Griender). The Texas government applies sales and use taxes at the final points of sale. Consumers are taxed for the goods and services they purchased outside Texas and used within the state of Texas. The sales and use tax is the highest tax revenue for the Texas government. In the fiscal year 2014, the Texas government collected approximately $19 billion in state sales taxes. Texas charges an average tax of 6.25% for all foods (Griender). The government set the rate in the year 1990, and there have not been any changes in the rates since then. Cities, transit systems, districts in the state and counties may impose the local taxes, which may be up by another 2 %. Majority of Texas residents pay total sales taxes of 8.5%. There are, however, many goods that are exempted from this tax. These commodities include motor vehicles, crude oil, mixed drinks, insurance premiums, and aviation fuel. This is because these items are taxed under other provisions. The Texas state aims at increasing sales tax revenue and removing the exemptions. The government also puts various measures to improve collections. Some of these measures include examination of funds from sales tax, tightening the eligibility for exemptions as well as scrutinizing applications for tax refunds on items meant to be tax-free. Texas state government collects various fees that are charged to people operating motor vehicles within the state. The largest source of these records revenues is the car registration fees and permits, which are meant for special vehicles such as vehicles with excess weight and size. Motor vehicle fees generate about $2.4 billion in a fiscal year (Griender). The 82nd legislature has powers to consider proposals that aim at increasing the motor vehicle registration fees. According to estimates from the Texas Transportation