Tax Allocation

Tax allocation refers to the process of dividing and assigning tax revenues collected by the government to different levels (federal, state, local) and specific purposes (education, healthcare, infrastructure). It determines how much of the total tax income is dedicated to each area or service. This helps ensure funds are distributed according to budget priorities and legal mandates, facilitating effective public spending. In essence, tax allocation is about efficiently directing the money collected from taxes so that it supports various government functions and community needs.