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Incomes or revenues play an important role in the formation of any budget. Budget revenues are money at the disposal of state and local governments that are received in a gratuitous manner to conduct their core functions. In the United States, budget revenues comprise tax and non-tax revenues, as well as unrequited transfers. Also, partly centralized revenues in the budget as total revenues may be credited to other levels of budget in the budgetary system for centralized funding of targeted measures. Quite important is the fact that non-tax revenues of the budgets are currently smaller comparing to tax revenues. However, with the effectiveness of non-tax revenue collection and management, a person can draw conclusions about the competence or incompetence of specific public managers. The main sources of non-tax revenues of the budgets include revenues from the use of property of municipal ownership, activities of enterprises and organizations in municipal property as well as income from foreign trade. Budget revenues, on the one hand, are the result of distribution of social product cost among various participators of social reproduction and, on the other hand, are the subject for further cost distribution concentrated in the hands of the state. The latter is used for the formation of budget funds and essentially represents the price of public services. The aim of this research is to analyze the non-tax revenues, where budgets of all levels and budget revenues (namely non-tax revenues) are subjects of the study. To achieve the goal, a researcher needs to consider the following tasks: examine the overall concept of non-tax revenues, study the composition and structure of non-tax revenues of the federal, regional, and local budgets, and analyze the non-tax revenues of the federal budget to draw conclusions about the features of formation and the role of non-tax revenues. Therefore, the non-tax revenues are an important source of revenue, the growth of which largely contributes to reduction of budget deficit at all levels, thus improving living standards in the country.
Non-Tax Revenues as Revenue of the Federal Budget Reserve
The function of the federal budget is distribution (redistributive function) or redistribution of funds within a single national economy between various sectors of the economy, between the productive and non-productive sectors of the economy, between separate territories, as well as between different population groups. As a result of redistribution, there are certain proportions between various sectors of the economy. For this reason, providing support for local authorities and municipalities with an insufficient tax base to form their own budgets, the most vulnerable groups, and individuals with low incomes allows to distribute funds necessary to ensure a normal standard of living. Using the budget for inter-sectoral and territorial redistribution of financial resources, the state solves the problem of rational distribution of productive forces in the country, ensuring balanced development of individual regions.
The budget also serves as an important tool for management and stimulation of economy. As a result, it may increase the efficiency of production, means of attracting additional investments for the development of the national economy. Using tools such as taxes, the state can stimulate or, conversely, hinder the development of certain sectors of the economy. This is done by identifying the list of taxes, tax rates, or tax exemptions for certain business entities or activities. However, non-tax revenues of the federal budget are not less important.
Non-tax revenues of the budgets are funds coming to the state and municipal property. in more detail, these are financial resources which are necessary for the effective implementation of public, social, economic, and other functions entrusted to the state and municipalities. Budget revenues are the economic relations which have arisen between the state, legal entities or individuals, and budgetary fund of the country in the process of budgeting. Budget revenues can be classified on various grounds. One of the main is the division of revenues depending on the shape of the formation. On this basis, there are three types of budget revenues: tax, non-tax, and gratuitous transfers.
As mentioned before, the second type of budget revenues is non-tax revenues. Most of the non-tax revenues are not firmly fixed rates with no fiscal and permanent nature. Unlike other budget revenues, non-tax revenues should not be rigidly planned; however, in practice they are planned, as a rule, based on the level of income of the previous year. One of the reasons is the existence of legislation to encourage this process. It should be noted that the regulations present non-tax revenues that differ either in nature or by source. For example, the composition of a non-tax revenue somewhat varies from the classification of different state institutions. Moreover, it can also imply inconsistency since each state of the United States has its own legislation. However, the non-tax revenues are often listed as income in the form of financial assistance received from other budgets.
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In the economic literature, non-tax revenues include revenues and budget funds (Chand, n.d.). As part of revenue, budget revenue is considered separately from budgetary funds. According to the legislative acts, budget revenues are known as Title 31 of the United States Code and Title 26 Internal Revenue Code (Cornell University Law School, n.d). Non-tax revenues, as well as taxes, are established by representative bodies of the United States of America and are subject to businesses and individuals. Non-tax revenues may take the form of both mandatory and voluntary payments. A large part of non-tax revenue is generated by obligatory payments. The regulations also specified the forced recovery of certain payments in the event of non-payment. Great goal orientation of revenues usage is more characteristic of non-tax than tax payments, which is enshrined in legislation in order to calculate and collect each individual payment.
Non-tax revenues are a component of the income of all types of budgets: federal and local budgets. However, non-tax revenues at the level of local authorities are not that public. Of particular importance in the system of non-tax revenue budget is the income from property use and sale owned by the state and municipality. Non-tax revenues in the narrow sense of the word are the income received in the form of fees for use of public funds or property, or compensation for services rendered by state corporations or individuals (Legislative Budget Board, 2014).
In modern literature non-tax revenues include:
- Penalty payments and other administrative fees (levied fines, the amounts received from the sale of confiscated property);
- Income from the use of federal property, property of the state or municipal property (e.g., income from renting buildings and structures);
- Incomes from the sale of property in federal ownership, ownership of the state or municipal property;
- Income from economic activities of the state and municipal enterprises;
- Funds received as compensation for damage;
- Income from external loans;
- Revenues from foreign trade, sales of government securities, and others;
- Other non-tax revenues.
Budget revenues from the use of property in state or municipal ownership are taken into account:
- Funds received in the form of rent or other fees for the change in temporary possession and use, or for temporary use of state or municipal property;
- Funds received from the transfer of state or municipal property, bail in trust;
- Funds received in the form of interest on the balance of budgetary funds in account with credit institutions;
- Fee for using budgetary funds provided by other budgets, foreign governments, or entities on a returnable and payable basis;
- Income in the form of profit per share in the authorized (share) capital of business partnerships and companies, and dividends on shares held by the United States of America, subject tothe country or municipal entities;
- Share of the profits of state and municipal unitary enterprises remaining after payment of taxes and other obligatory payments;
- Other proceeds from the use of state and municipal property stipulated by the legislation of the United States of America.
Revenues of a budgetary establishment received from entrepreneurial and other income-generating activities, after taxes and fees stipulated by the legislation on taxes and duties, is fully accounted for in the estimate of income and expenditure of budgetary institutions. They are also reflected in the income of the budget as revenue from the use of the property under state or municipal ownership or revenues from paid services. Incomes from the sale of property owned by the state and municipality are the funds received from the sale of state and municipal property to be credited to the appropriate budgets in full.
Revenues actually received in the budget over and above the approved law (decision) on the budget are usually sent to the authority dealing with the budget to decrease the size of the budget deficit and payments that reduce the debt of the budget, without making amendments and additions to the law (decision) on the budget. The authorized executive body shall prepare and approve an additional budget schedule. Therefore, the employment of the revenue from non-tax revenue budget depends on the decision regarding public, social, economic, and other problems (Prichard, Salardi & Sega, 2014).
The Composition and Structure of Federal Budget Non-Tax Revenues
Revenues of the federal budget are money that comes in a gratuitous manner in accordance with the budget and tax legislation of the United States of America and is at the disposal of the federal authorities. The federal budget revenue consists of:
- Tax revenues of the federal budget, except for income tax passed in the form of regulatory revenue budgets of other levels of the budgetary system of the United States;
- Non-tax revenues;
- Surplus at the end of the previous year;
- Income received in the form of gratuitous and irrevocable transfers.
The federal budget, literally, is a form of collecting and spending money per fiscal year, which are intended for execution of expenditure obligations of the United States of America. Non-tax revenues of the federal budget are in accordance with the 26th Code among other regulatory acts (Cornell University Law School, n.d):
- Income from the use of property owned by the state, revenue from paid services rendered by budget institutions under the jurisdiction of state authorities of the United States of America, and after payment of taxes and duties stipulated by the legislation on taxes in full;
- Health and human fees;
- Higher education fees;
- Part of the profit of the unitary enterprises established by the United States, which remains after taxes and other obligatory payments in the amount established by the government of the United States of America (Cornell University Law School, n.d);
- License fees – at the rate of 100 per cent;
- Customs duties and customs fees – at the rate of 100 per cent;
- Payments for the use of forest fund in terms of the minimum rates for timber sold in standing – at the rate of 100 per cent;
- Payment for the transfer of forest land to a non-forest area and transfer of forest land to other land categories – at the rate of 100 per cent;
- Payment for the use of water – at the rate of 100 per cent;
- Fee for the use of aquatic biological resources under intergovernmental agreements – at the rate of 100 per cent;
- Charges for negative impact on the environment;
- Consular fees;
- Patent fees;
- Payment for the provision of information on registered titles to real estate and transactions with it – at the rate of 100 percent.
Therefore, the revenues of the federal budget of the United States of America are composed mainly of taxation of enterprises and organizations of various forms of ownership, value added tax, excise duties, and customs duties. The federal budget receives taxes, duties, and other fees from the population for services rendered.
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Income, as a non-tax revenue, of state and local government organizations from natural resources has the greatest value in the non-tax revenues of budgets of all levels. In terms of revenue, the second article non-tax revenues in the federal budget are higher education, which includes interest on government loans. However, there is low efficiency of state property management that has a potential to grow, thus becoming one of the biggest sectors among non-tax revenues. There are certain reserves for increasing non-tax revenues, which are formed through the use of state property. First of all, the increase can be achieved by improving the management of state ownership in the joint-stock companies and, accordingly, raise dividends on the shares owned by the state.
Firstly, government representatives have a limited set of rights and opportunities that do not allow them to adequately influence the decisions taken by the joint-stock company, which may be contrary to the public interest. Secondly, the activities of state representatives are often an additional burden to their basic professional duties that does not provide incentives for efficient operation. Thirdly, state representatives are often characterized by a low level of professionalism and expertise in the field of property management.
It is necessary to adopt a number of regulations governing the activities of state representatives in order to get an effective government institute of representatives. The following aspects should be more clearly defined: the responsibilities of government representatives; the degree of independence of making certain decisions; a system of incentives; economic responsibility for damage caused by unprofessional actions of state property or unqualified exercise of their functions; system of training of government representatives; system of selection of civil servants to perform this function.
Non-Tax Revenues of the States Budgets
Revenues of the states budgets are money that is obtained gratuitously and irrevocably in accordance with the inner state and the United States legislation, concerns a specific area, and is at the disposal of the bodies of state power.
Budget revenues of each state are formed by:
- Tax revenues from state taxes, federal taxes, as well as fees and taxes provided for by special tax regimes;
- Non-tax revenues;
- Other revenues.
Non-tax revenues of states budgets shall be formed in accordance with the 26th and 31st Codes, including a part of the profit of the unitary enterprises created by the states of the United States of America, which remains after taxation and other obligatory payments to the budget, in the amount established by the laws of the United States (Cornell University Law School, n.d).
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Non-tax revenues of budgets of subjects include:
1) Income from the use of property owned by the state authority after the payment of taxes and duties stipulated by the legislation on taxes and duties, including:
- funds received in the form of rent or other fees for the change in temporary possession and use, or for temporary use of state property;
- funds obtained in the form of interest on the balance of budgetary funds in account with credit institutions;
- funds derived from the transfer of property in state property area, bail in trust;
- fees for the use of budgetary funds provided by other budgets, foreign governments, or entities on a returnable and payable basis;
- income in the form of profit per share in the authorized (share) capital of business partnerships and companies, and dividends on shares held by the field;
- other proceeds from the use of property owned by the state sector provided by the legislation of the United States of America;
2) Part of the profit (income) of the state unitary enterprises of the region, remaining at their disposal after payment of taxes and other obligatory payments in the amount established by the law of the area on the regional budget;
3) Revenues of budgetary institutions received from entrepreneurial and other income-generating activities after taxes and fees stipulated by the legislation on taxes and duties, fully accounted for in the estimate of income and expenditure of budgetary institutions, and reflected in the income of regional budget revenues from the use of property located in the regional state property, or as income from paid services;
4) Income from the paid services provided by budgetary institutions under the jurisdiction of the state administration after payment of taxes and duties stipulated by the legislation on taxes and fees;
5) Funds received as a result of the measures of civil, administrative, and criminal penalties, including fines, confiscation, compensation; and funds received as compensation for damage caused to the area; and other sums of compulsory withdrawal in accordance with the legislation of the United States of America and the state authorities, as well as decisions of the courts;
6) Fees for higher education;
7) Income derived from the sale of property located in the area of state property, subject to the regional budget in its entirety.
8) The fee for a negative impact on the environment;
9) Income for the use of natural resources;
10) Health and human services fees;
11) Payments for the use of forest resources with the minimum rates for timber sold in standing;
12) Other non-tax revenues to be transferred to the regional budget in accordance with the legislation of the United States of America and the state authorities.
The revenue budgets of the largest share have the tax revenues. Non-tax revenues make up about 17-40% of the total income (Edling, n.d.). The remaining share of revenue is accounted for gratuitous and irrevocable transfers of funds mainly from the budgets of other levels in the form of grants and subsidies (transfers).
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