ABSTRACT
This chapter explores four sets of issues and determinants that go into basic decisions about tax policy: revenue sources; tax incentives; tax levels; taxes and legislation. The federal government has two major kinds of income: government receipts; and offsetting receipts and collections. Government receipts include personal income and corporation taxes, customs duties, estate taxes—in fact, anything the government gets through the exercise of its sovereign power. Offsetting collections are generally available to the agency that collects them; they are credited directly to the agency's expenditure account. The guarantee of funding from offsetting collections can be an important consideration when crafting a new program that includes a discrete income stream. The distinction between tax receipts and user charges carries political as well as legal implications. The tax-cuts-pay-for-themselves mantra is an important element in the political debates surrounding tax policy. It has spawned pressures within Congress to implement dynamic scoring.
