ABSTRACT
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3.1 Introduction The United States is a federal system of government, in which each level of government has some powers, as defined by the U.S. Constitution, to levy taxes and provide certain services. A situation normally referred to as the “fiscal federalism” in the United States (Advisory Commission on Intergovernmental Relations, 1995). This chapter provides a brief overview of expenditures and revenues for all levels of U.S. governments. The first section discusses government expenditures, including the overall size and growth of government, the explanation of governmental expansion, and the breakdown of responsibilities for each level of government. The second section describes major sources of revenues for each level of government to fund their services, including revenues that are raised by a government itself as well as intergovernmental transfers.
