How To Make A Budget
You wouldn't find this on the back of a Betty Crocker cake mix!
Which came first, the chicken or the egg? Who plays on second – the budget or the tax?
From an academic point of view, the chicken came first - the egg is a product of the process. So when you review the budget – is it in terms of what you have collected? Do your top 5 priorities comprise a majority of expenses?
- Start your budget process with a review of last year’s budget. Label the top 5 expenses and compare them to stated goals – do they match?
- Know your income for the last 5 years, and adjust next year’s projections as needed.
- Know your goals for the coming year - commit the funds accordingly.
Now the tough question – are you willing to adjust expenses, or are you looking to expand taxes? Do you believe govt should create a productive environment for individuals, or do you believe individuals should contribute to greater govt?
From a budget point of view, decide what is important as a community (prioritize by voting), then raise funds to accomplish it. Please note I specifically said "important as a community", not "important to the community". The "as" promotes teamwork and lifting each other up (democracy); the "to" implies someone/s decides what is best for the community (dictatorship).
I propose that all taxes have term limits - short term limits. Of course, I support term limits for politicians too. Taxes should be ear-marked for a specific purpose, and auditable so at least 90% reach the intended purpose. If you've got more than 10% swallowed up in "administrative-ness", you're doing something wrong. Taxes shouldn't live forever, and neither should politicians.
This isn’t a one-size-fits-all issue. 100% democracy isn’t right for all people, and 100% capitalism only makes the rich wealthier. Where does your community fit on the scale of anarchy to oligarchy? Which comes first – the budget or the tax. We all know who plays second!
