ABSTRACT
This chapter discusses the theories and ideas about how budgets should be formulated and executed, including the strengths and weaknesses of these approaches. Retail sales taxes are the single largest source of state and local tax revenue, albeit still less than one-half of all state revenue is derived from this source. The main advantages of sales taxes are their broad potential tax base-theoretically applying to all retail sales-capable of producing plentiful revenue and their relative ease to collect. Perhaps the economy has performed worse than anticipated and consequently revenues from income taxes have fallen off because of higher than anticipated unemployment and slower than anticipated growth in personal and corporate income. Incrementalism has been the favored political approach to public budgeting in the United States. The managerial, political, and judicial approaches identify important concerns in the area of public budgeting.
