Revenue Mix

Tax revenue is a fundamental component to governmental budgets and subsequent spending. Particularly, in economic downturns, government tends to spend large sums of money in an effort to stimulate the economy and drive economic growth. To properly prepare and mitigate the cyclical nature of tax revenues, diversification is required. Through proper diversification, governments are better positioned to provide adequate service irrespective of the prevailing macroeconomic circumstances. Although aspects such as interest rates, political grid-lock, and unemployment impact all governments; through a diversified revenue stream, the impact of such occurrences will be significantly diminished. As such, a thorough tax revenue analysis is needed to prepare the city of Swobodaville for the cyclical nature of the business cycle, and the subsequent volatility in tax revenue (Williams, 2008).

When analyzing the cities overall tax composition, a larger share of tax revenue comes from personal income as oppose to corporate income. The...
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