Alabama’s population is approximately 4.9 million, where around 95 individuals live per square mile. More than half of the population is White Americans, which is about 68%, whereas African Americans make up to 27% of the total population (“Alabama population 2019 (demographics, maps, graphs),” 2019). In addition, approximately 86% of all citizens claim to be related and associated with Christianity, whereas the remaining 12% of people are either affiliated with other religions or hold no religious beliefs (“Alabama population 2019 (demographics, maps, graphs),” 2019). Alabama is ranked as the 24th state by its population size.
There are five major sources of revenue for the state of Alabama. These are fee and charge, Ad valorem taxes, income taxes, social insurance taxes, and business and its derivative activities (“Government revenue details,” 2019). For three-year analysis, fees and charges made up 27%, ad valorem taxes 30%, income taxes 12%, social insurance taxes 17%, and business-related activities 15% (“Government revenue details,” 2019).
For the last three years, there were no drastic changes in the revenue source sizes or shifts towards new income generators. The relative proportional values of each revenue source also did not change and stayed mostly in a stable manner. The total direct revenue for the state of Alabama for three years was 23-24 billion dollars each year (“Government revenue details,” 2019).
However, although for the last three years, there were no significant budget expenditure changes in terms of proportional values, the budget allocation ways were more diverse. Alabama spent budget’s 25% on education, 36% on healthcare, 12% on pensions, 2% on interests, 7% on transportation, 9% on welfare, and the remaining 9% on another spending (“Alabama state 2019 spending by function,” 2019). The total spending amount for the last three years was ranged from 25 to 27 billion dollars (“Alabama state 2019 spending by function,” 2019). Therefore, it is critical to note that the overall budget flow remained relatively stable.
The given municipality does not experience serious budget deficiencies. However, most of the spending goes to the healthcare sector. The main issue of the state of Alabama lies in the continuously growing tendency in healthcare expenditures, which is highly common in the US. The main directions of corporate income tax reform a gradual reduction of the corporate income tax rate due to the abolition of unreasonable tax benefits, implementation of certain compensatory measures. The definition in the legislation on taxation of profits of the enterprise is the principle of accrual and conformity of income and expenses, according to which the financial result of the enterprise’s activity in the accounting system is determined.
Improvement of the depreciation procedure should be focused on the introduction of all five methods of depreciation and the distribution of fixed assets. The development of certain provisions of the tax legislation needs to be integrated in order to resolve the problematic issues arising during the calculation and payment of tax by the branches of enterprises. In addition, separating accounting by separate units and the amount of tax at their location while maintaining the consolidated debt is vital for budget maintenance.
Providing special investment privileges in the form of tax for start-ups and the introduction of a standard price mechanism will facilitate the correct reflection of business transactions. Equalization of the tax burden on economic entities operating in the financial services market should be evaluated. This can be done by transferring insurers to income tax under the general rules while maintaining the combined system of paying taxes for three years.
References
Alabama population 2019 (demographics, maps, graphs). (2019). Web.
Alabama state 2019 spending by function. (2019). Web.
Government revenue details. (2019). Web.