Moving down in the hierarchy are intermediate appeals courts; not all states have them. Trial courts are at the bottom of the rank and consist of two types. As the name indicates, minor courts are those that attend to negligible infractions, such as traffic tickets and small claims. Another kind of trial court, sometimes called superior courts or district courts, has a broader jurisdiction and handles more serious crimes and lawsuits than those found in minor courts.
Naturally, federal courts hear cases in which the interpretation and application of the U.S. Constitution and other federal mandates and treaties are concerned. The federal courts have jurisdiction over those cases involving disputes between two or more states. In addition, they may hear cases that include a disagreement between the United States and one of its states. Lawsuits brought against foreign ambassadors and other diplomats also fall under the jurisdiction of the U.S. federal courts. If a state initiates a grievance against a citizen of another state, the federal courts become involved. What's more, when an American citizen sues a foreign government or citizen, federal courts are again called to preside over such cases. These courts also have jurisdiction over maritime law. Nearly all know that lower court appeals may be heard in federal courts.
As is obvious, the American judicial system, with its powers distributed between federal and state courts, is a complex and sometimes confusing one. Nonetheless, such structure embodies one of the most important American values: an equitable distribution of power. Therefore, despite an intricate maze of courts, this system is preferred as it reduces the likelihood of concentrated unfair power, the antithesis of American principles.
In 1913, with the adoption of the 16th Amendment to the U.S. Constitution, Congress was given the power to tax incomes. A combination of income taxes-both individual and corporate, social insurance taxes, excise taxes, estate and gift taxes, customs duties, and miscellaneous receipts such as interest on loan payments and fees for copyrights and passports, allows the government to raise money so that it can then spend it on public programs. Since its inception, government finance has been a controversial issue in the United States.
The process of government finance is a long and involved one. The U.S. government creates a budget, which is a detailed record of projected revenue and income and intended expenditures during a definite period. In other words, it is a plan for the management of public funds, personnel, and property. First, federal programs, such as defense and welfare, generate an account of the upcoming year's estimated financial needs. The Office of Management and Budget (OMB), which directs the preparation of the federal budget, then reviews these departmental budgets. The OMB submits the federal budget to the president who then passes it on to Congress. House and Senate budget committees study it and obtain an analysis of it from the Congressional Budget Office (CBO). Each committee submits to its respective chambers a budget resolution that suggests a cumulative budget limit in addition to departmental budget limits. Congress then modifies and adopts the budget resolutions. Next, Congress attends to the appropriation of funds to specific agencies and programs. Finally, a second budget resolution is approved. This requires a settlement between the general budget ceiling and separate appropriations bills.
To better understand the budget process and government finance, it is important to grasp fundamental concepts such as budget surplus and deficit and national debt. Simply stated, a budget surplus means that the government has more funds coming in than going out. What's more, a budget surplus saps the economy of money. Conversely, a budget deficit involves more money going out than coming in. This means that extra money circulates in the economy. National debt, also called public debt, refers to the amount of money owed by the government. There is internal and external debt. The former is the portion of the money owed to domestic creditors whereas the latter concerns money owed to foreign lenders. To function effectively, a government must consider the aforementioned concepts during the financing process.
There have been many reforms during America's history of taxation. For example, in 1986 with the Tax Reform Act, the government replaced over a dozen tax brackets with two (15% and 28%); many citizens living in poverty were exempt altogether. Furthermore, personal exemptions were increased and some deductions were eliminated. Corporate taxes were lowered and many loopholes were closed. In 1990 and 1993, increases in gasoline taxes occurred. Politicians assured the public that more roads and buses as well as a reduced federal deficit would compensate for this tax hike. In 1993, the Budget Reconciliation Act produced several reforms including the creation of a fourth tax bracket for high-income taxpayers and the eventual elimination of their personal exemptions. In addition, it subjected to taxation the Social Security benefits of individuals and couples earning over a specific amount. Corporations did not escape the grasp of this act either as their rates were increased as well. Currently, there is serious discussion about Social Security tax reforms. It is should be of no surprise that tax reform will continue to be an integral albeit controversial aspect of American politics, economics, and public interest.
Wilson, James Q. & Dilulio, John, J. (1998). American Government. Boston: Houghton Mifflin