Apple Inc.

Apple incurs both fixed costs and variable costs. Fixed costs include depreciation and rent while variable includes labor, research and development costs .Some of explicit costs include legal fees, advertising, rent and administrative costs. Implicit cost for Apple includes opportunity costs for renting its patents. As the production capacity for Apple continues increasing, it will reach a point when more capacity increment will not lead to considerable improvement in output. The increase in capacity may be through additional workstations, hiring employees or buying and installing more machinery in the factory. The production output for each unit begins decreasing while the return for every additional unit reduces with it- diminished returns (Tucker, 2011). The additional machinery is bound to fixed costs like depreciation which may not be recovered due to reduced production on these machines. Expansion in the production will be less costly and the variable costs in associated may lead more long-run average cost in the production process and hence, less profitability.

Economies of scale refer to cost advantage resulting from more output of a product (Tucker, 2011). Apple benefits a lot from economies of scale which gives it a cost advantage over its rivals; given that its large production volume ensures that there is reduction in variable cost per unit and eventually total cost of production.  The increased production volume means that marginal cost decrease which helps to drive down total cost and hence, the firm is able to always make above normal profits. The firm is able to produce various makes of multi-purpose phones, personal computers music players which help to reduce the variable cost for the firm (Forbes, 2016).

Apple short –run period may be over one year period given that its production process takes about a year to produces new products into the market.  In the period of one year the firm may experience fixed and variable cost changes so that wages, output and prices may not freely attain a new equilibrium.

Reference

Tucker, I. B. (2011). Economics for today. Mason, OH: South-Western Cengage Learning.

Forbes,(2016).#41 Apple. Retrieved from: https://www.forbes.com/companies/apple/

Advance Payment ACO Model

This model  has been designed to be used by rural  providers and physician based providers who have  joined hands together in giving coordination of high quality health care  to the Medicare patients they provide the service.  Through this model the selected supervisors receive monthly upfront payments which they then use in making essential investments in the infrastructure for care coordination (CMS, n.d). In the beginning years of his model, the payment models that had been tested shared a payment policy for savings that had higher risks and shared savings for the Pioneer ACOs than those recommended in Shared Savings Program.  The aim of this model is to offer higher quality care that is seamless (CMS, n.d).

This model is very useful for health care providers and organization that have experience in the coordination of patient care across various settings of care.  The payment models involved in this initiative incorporate risk utilization and require that healthcare providers participate in the management of population.  Hence, in general terms the model aims at fulfilling the intentions of Affordable Care Act by improving outcomes for beneficiaries and increasing value of the offered care (Partners Healthcare, 2014). This is achieved through the provision of better healthcare for individuals and populations and reducing growth in healthcare expenditures.  Providers who participate in the Pioneer ACO are not affected in regard to how they provide healthcare to their patients.  In the billing process where partners meet the requirements for Pioneer ACO program in the first and second year, there is an option in the third year for putting in place a payment system that is population based (Partners Healthcare, 2014). It is an efficient model that ensures reduction of healthcare cost.

Reference

Pay-for-performance plans

Measuring the performance of any compensation plan should be a continuous process but not just a quick win. The process of assessing the plan should consider important changes needed in the process while putting up performance measures and then monitoring how the process is progressing against such measures. For this to be done effectively for pay-for –performance plan focus should be placed on major measures of human capital , which should then be integrated into the reporting processes (Mathis & Jackson,  2010). A major factor to consider is whether the plan is relevant to the health of an organization. A balance should be sought, on how the firm will gain by implementing the pay-for-performance against what the cost of this measure will be to both the employees and the organization. This involves considering whether the plan will have a direct impact on the performance of the employees and the organization at large both in the long-run and in the short run (Mathis & Jackson, 2010).

In assessing the effectiveness of this plan, it is also important to consider whether it can be controlled, so that the employees can have an influence on the outcome of the plan. For this plan to be effective it should be motivational, so that employees’ efforts can negatively or positively affect the results. In order to measure the employees’ performance, it is important to consider whether other factors that may influence the performance of employees have been considered in the plan (Mathis & Jackson, 2010). It would be difficult to defend the use of the plan pegged on performance if the working environment hinders the employees from maximizing their performance. Hence, the objective of the plan should be to motivate the employees while being geared towards fairness and achievement of overall organizational goal.

The performance based pay may end up not benefiting many of the employees but can harm be harmed by it for various reasons. To begin with, this plan seem to favor those who are credited with revenue generation mostly the senior executives , sales and marketing teams and other areas in organizations that are considered to be cost centers while ignoring the average workers. In addition, the revenue generating activities may be offered rewards in a disproportionate manner so that fairness is not observed across-board (Solmon & Podgursky, 2001). A good reasoning behind this notion is that profit pools on which bonuses are based is relate directly to the generated revenues but indirectly related to costs and hence those who facilitate the top line should be offered the biggest share of such bonus. Moreover, in case of public schools teachers cannot control the class-size, mobility and language proficiency of students and these factors are known to influence significantly the performance of the students in any learning centers.     

A major problem is that an organization’s cost centers play a major role in sustaining the foundation that ensure revenue generation is possible, a fact which is not likely to be due share than others like sales. Another disadvantage is that the pay-for-performance results to unhealthy competition since it is assumed that humans respond to such rewards and work very hard to attain them.  Research has, on the contrary, shown that such a plan can pit workers against one another and create a very unhealthy competition environment (Kumar, 2015). While this doesn’t mean that personal achievement should go unrewarded, but when using the bonuses based on performance as the key tool of employee motivation , team spirit can be destroyed which is needed for an organization’s success and  may leave many workers behind. Another disadvantage is that functions performance may not be measured in a clear cut manner since some have distinct edge where efforts vs. results can be quantified while others may not be quantified (Snell, Morris & Bohlander, 2015).  

From an employer’s perspective, the use of performance based pay plan can results to unintended results. Firstly, the quality of employee productivity may deteriorate significantly. This plan of compensation can make employees to place their focus on products quantity instead of quality which can lead to production of low quality services or products (Mathis & Jackson,  2010). For instance, teachers can engage in dubious activities that make it possible for students to obtain high scores while placing less focus on the overall learning process that includes other aspects apart from academic.

In addition, employees may not benefit from the impact of teamwork on organizational or institutional performance.  Employees whose focus is on attaining personal goals can be less willing to work as a team. Such employees may fail to offer required assistance to colleagues or co-workers who are struggling in their functions since they perceive this as wastage of time which they could use to improve their productivity. Conflict can also arise among employees due to lack of cooperation or a perception that co-workers are obstructing others performance preventing them from attaining their goals(Snell, Morris & Bohlander, 2015). This creates a nonconductive working environment which prevents employees from attaining their best performance and thus stifling the performance of the whole organization.  

Reference

Solmon, L., Podgursky, M.,(2001).The Pros and Cons of Performance-Based Compensation. Retrieved from: https://faculty.missouri.edu/~podgurskym/wp-content/uploads/2001/art2001-10.pdf

According to Murray & Cutt (2002), accountability is a framework which is used by public and nonprofit organization in improving information and making decision.  Accountability is multi-layered due to the various social services which are offered by non-profit organizations.  Thus, responsible parties are accountable to execute a variety of activities and achieve the outcomes. In defining accountability, Murray asserts that it is the role of responsible parties to meet the information requirements, evaluate and create decisions (Murray Vic & Cutt, 2002). He adds that if programs and performance are meaningful, then accountability is valued and defined as a purposeful activity.  In other words, organization programs and performance are related with accountability. In this case, accountability becomes a meaningful framework as it becomes connected with shared expectations, shared language and shared criteria (Murray Vic & Cutt, 2002).  All these references explain the way in which responsible parties will fulfill their duties.  

Murray & Cutt (2002) asserts that accountability is relevant in the management cycle.  Management involves programmatic activities such as planning, budgeting, monitoring, internal evaluation and so forth. Accountability information is reported from these particular activities during the management cycle. In addition, accountability frameworks are created by two parties- one party allocates accountability and the other one accepts. It also requires a hierarchical model which ranges from vertical, lateral and external and external levels of organization. Internal accountability is offered by employees, line mangers and program managers. External accountability is offered by CEO and he or she is accountable to the governing body (Murray Vic & Cutt, 2002). Administrative accountability focuses on issues of shared expectation, method of reporting and evaluates the accountability of the governing bodies. An important point that individual in organization are held accountable with respect to their specific responsibilities.  Other important point is that accountability has limitations in responsibilities and authority. For example, managers are not accountable for issues which they have no authority. This means that they are only accountable for matters which they are responsible and they have control (Murray Vic & Cutt, 2002). However, it is argued that even the managers are not accountable for issue which they lack control, they should develop a management system. The author states that managers should have objectivity and subjective accountability. The former means that managers should   be accountable for the assigned responsibility and for the measured mile. The latter means that managers should apply personal standards, ethics and standards and have a sense of responsibility (Murray Vic & Cutt, 2002).

Murray’s conceptions on accountability are comparable with Ebrahim’s conceptions in that both introduce the conflict issue between funders and fundees. First, accountability is facilitated by the use of performance assessment and evaluation. External evaluation and assessments are important in   measuring whether the goals and objectives are met and the process for future funding (Ebrahim, 2010). Evaluation also plays an important role in planning short-term and long-term activities. Nonprofit staffs are able to increase performance and strive to achieve goals and objectives. They assert that nonprofit organizations raise questions on assessing activities, outcome and impacts. In evaluating causal factors, nonprofit leaders face challenges on reliability, measurement and control (Ebrahim, 2010). Murray and Ebrahim assert that there is a big problem in evaluation process since nonprofit managers and stakeholders are unable to make effective decisions on allocation of funds.  Evaluation difference between funders and stakeholders bring different evaluations. Stakeholders’ diverse views on who should be funded bring conflict and lack of evaluation hinders the implementation of solution to the problem (Ebrahim, 2010). These conceptions conclude that evaluation is an important tool in accountability.

Reference

Murray Vic & Cutt James (2002). Accountability and Effectiveness Evaluation in Nonprofit Organizations.

Routledge Studies in the Management of Voluntary and Non-Profit Organizations. Routlegde

Ebrahim Alnoor (2010). The Many Faces of Nonprofit Accountability.  Harvard Business School.

Accounting

A career in accounting presents various opportunities for personal career growth and development due to the diversity in this field which is rarely seen across other career paths.  This choice will allow me to work as a financial specialist in various areas including business, banking, forensic accounting and a consultant.  All organizations including governments and non- profit making organizations and even individuals need accountants for financial management, book keeping and reporting (WeetFeet (firm), 59). Being an accountant will allow me to work fulltime in an organization or serve multiple clients depending on my preference and where demand is.

My career path started with deciding what I want to do and looking for one thing that is exciting to me and my preference was accounting. Therefore, I chose the course that allowed me to learn about commerce, business flow and an overall understanding of business.  My best choice was to become a public accountant which could allow me to achieve my career dream. Hence, in college I took to the appropriate accounting classes to form the basis of my accounting education.

My professionalism in accounting is enhanced by a CPA Certification and licensing, which is a requirement for one to practice in public accounting (NASBA, 1). For me to qualify for this certificate I had to sit for and pass a CPA examination which is an indication of expertise in this field.  The attainment of this certification enables me to offer accounting services to any firm or the general public. I can use the designation behind my name to show the experience level among the many practicing accountants and hence no one can raise doubts on my level of qualification. The certification allows for growth in accounting career, becoming a full auditor and assuming managerial positions in an organization (AICPA, 2). With such certification it is possible to be a management consultant, analyst or a financial planner.

The various forms of information technology that I use in accounting profession include technological accounting systems and the E- business.  The information technology involves software such as spreadsheet programs, accounting programs like QuickBooks that help in various calculations and reporting.  The programs and software are affordable and easy to use and assist in daily tasks like recording transactions, paying bills and reporting (Gelinas, 26).  The E-business involves the use of internet in accounting processes and enables one to coordinate activities necessary for internal management while combining customers’ relationships using digital networks in a firm. The information technology systems are also usable where there is need for accounting security. By use of identification such as passwords, a limit is put on who can access the confidential information (Gelinas, 26).

In the accounting career, writing and verbal skills are very important communication skills. Writing skills are needed in giving instructions, letters and notices to clients and in preparation of financial reports. Verbal skills are important for interpretation and networking. Interpersonal skills involve the ability to maintain professionalism while interacting with people(WeetFeet (firm), 60). 

The most challenging responsibilities as an accountant involve providing expert advice to the management or individuals knowing well that for any financial decision they make, I share the consequences.

For the students beginning their accounting career, they should know that growing the career involve putting effort right from the beginning. Having the discipline to study hard and acquiring professional certification is very essential for career growth. Finally it pays in terms of diverse opportunities with good monetary rewards.  

Works cited

DRG payor system

Pros

DRG is a cost effective method. The system reduces the cost per case through providing cost-effective services. The hospital will enjoy benefit as it will save money and get a reward from per-case payment. The cost per admission will be reduced by reducing the length of stay (Berenson, 2016). Other advantage in this system is that hospitals will increase the admissions by prolonging the length of stay or by admitting new patients.  Profitable admissions will play an important role in increasing revenue.  The payment system encourages hospitals to offer quality services through competition. In this case, competition will emerge when hospitals will increase admissions and recruit qualified doctors who are specialized in treating different illnesses (Berenson, 2016).  On the same note, specialization in specific services will increase quality and cost. With the system, hospitals will create transparency, quality decision making with the use of data, increase in collaboration and quality health care services.

Cons

The reduction of length of stay and cost per case will lead to over admission of patients.  This also will result to under provision of services. When offering services, the physician will admit high number of patients and provide premature discharges. A major limitation will become apparent in physicians’ role.  Traditionally, physicians were following ethics and they could make decision and control the services (Berenson, 2016). However, physicians will concentrate on making profit and hospital success but not quality services. Medical technology will also be affected because the system will focus on current system of the hospital and not the implementation of new technology in order to offer quality services. This means that certain services which require modern technology will be eliminated (Berenson, 2016). Note that DRG system will not reimburse a new technology and for this reason hospitals will be unable to access expensive equipments.

Capitated payor 

Pros

Capitated payor payment system is effective in increasing preventive care. Physicians are motivated to provide quality care within a fixed budget. With this system, physicians will use their capacity in medical management and control various functions. Hospitals will find more infrastructures and create an effective health plan where patients can access quality care. The hospital will also purchase new services which help healthcare providers work effectively and handle capitation. Health care services will improve as physicians will be forced to learn new skills on management and IT and implement substantial investments on decision support systems.  Physicians will create a collaborative relationship in influencing the health center image through quality services. They will take a proactive approach and be fully committed in practice operations.  The hospital in general will apply responsible efforts and improve healthcare management so that the community can have universal access to healthcare. There will be a strong relationship between physicians and community in discussing the resources required in offering quality care.

Cons

 In order to offer quality care, providers must ensure that the hospital has a high quality management which will help in providing cost-effective care.  In other word, providers are required to operate effectively with the use of quality infrastructure which will cater for diverse cultures (Burke, 2016).  The hospital will face difficulties in creating quality management structure and a fully integrated delivery system. Other disadvantage is that the payment system will pose investment challenge where new infrastructure, new roles and transformation of delivery system will be needed.  The system will modify the provider payment as the organization will need to create new payment services and the process may cause conflict (Burke, 2016).  The payment system will also pose challenges between providers and patients.  In managing costs, the provider may change the utilization of management, equipments, approvals and denials.  This may cause ‘customer- disappointment and damage the relationship.

 If I were a heathcare aczar, I would favor the DRG payor system. The system has a positive impact on quality and efficiency. This method is effective in that it provides transparency and accurate description in financing (Burke, 2016).  I like this system because it promotes greater efficiency through maximizing output. This means that providers will offer quality services to many patients with availability of resources. The system is effective for rate-setting system which means the productivity and effectiveness will be accurately measured (Burke, 2016).

Reference

Burke C. Gregory, Brundage C. Suzanne & Myers Nathan.(2016). Capitation and the Evolving Roles of

Providers and Payers in New York. United Hospital Fund.

Berenson A. Robert, Upadhyay K. Divvy, Delbanco F. Suzanne. Murray Roslyn. (2016).  Diagnosis Related

Groups–Based Payment to Hospitals for Inpatient Stays.  Urban Institution

Career options in accounting

            Tax accountants are essential in the economy as they are not just number professionals but they are also people who are able to communicate the abstracts of concepts to their clients. Budget analyst is another career option in accounting sector and this department initiates a connection between the resources as well as the company’s target and also their functions. This is a prestigious job that not only has a prestigious salary but it helps in the interpersonal as well as the organization’s development (Warren et al 2009). Being a budget analyst necessitates that one has to perform the fundamental daily work such as critical analysis of accounting reports, researching on the program activities, involving themselves in programs by attending the briefings and assessing budgets as well as the financial plans.

            Budget analysts are expected to possess certain skills which enhance them to be successful in their roles. They should poses management skills of the financial resources as it will enhance them to be able to determine on the manner in which currency will be used up so as to get the work successfully completed and also they are accountable for all of these expenditures. They also have the skills of coordination as this enables them to adjust actions in connection to other’s actions (Warren et al 2009). They also poses the skills of system evaluation which enhances them to realize actions or markers of the organization performance as well as the dealings that are considered necessary so as to progress and to correct on the performance that is in relation with the system’s goals. Active learning skills are also important in this line of accounting as it ensures that the analyst understand the repercussion of new information so as to be able to solve the current as well as the future problems and aid in decision making.

References

Warren, Carl S, James M. Reeve, and Jonathan Duchac  (2009). Financial and Managerial Accounting. Mason, Ohio: South-Western Cengage Learning, Print.

Inventory policy

            The inventory policy institutes a process that is used for the recording, recognition and accountability of all the assets. The policy delineates principles and accounting standards that ensures that the inventory is appropriately controlled as well as cost analyzed while the losses and shortages are prevented from occurring. This therefore applies to all the inventory items that are inclusive of the raw materials, ongoing work, and consigned inventory as well as finished products. The inventory process is quite essential in the management of an organization’s finance system as the financial statements are used to diagnose some shortcomings or a profit margin. Therefore the inventory may positively or negatively impact the cash flow for both the profit and the nonprofit organization. For instance, too much of an inventory may be used by financiers to explain the excessive storage space which may result into spoilage of the stock hence increase in cash sale as the sales will be high due to the availability of products in the business. However, too little inventory may be perceived as a business loss and a reduction in the cash flow due to the loss of sales and customers that is attributed by shortage of stock. However, according to the various researches it is concluded that cash flows are determined by the current assets rather than the non-current assets (Larkin et al 2013).  Inventories vary largely in their liquidities and also the inventories of smaller businesses are liquidated more rapidly as compared to the larger businesses. However these large businesses such as the wholesalers have large and varied stock usually are in a position to offer credit and rent business shops in high rent charges localities thus they have a large inventory with larger sales volume but a smaller profit margin.

Reference

Top of Form

Larkin, R. F., & DiTommaso, M. (2013). Wiley not-for-profit GAAP 2013: Interpretation and application of generally accepted accounting principles for not-for-profit organizations. Hoboken, N.J: John Wiley & Sons Inc.

Bottom of Form

Accounting

An account can be said to be a record that is used in increasing and decreasing assets, liability and equity. It is used to analyze the effects of the transactions on the basis of the accounting equation. The recording process in accounting involves three major steps which are used to keep track on all transactions and data (Weygandt, 2010). This makes it easy to have a clear view and update of all the activities in the accounting period. This information is later combined to form financial statements. The major steps include the account which consists of debits and credits as well as equity. The recording process includes steps like the journal which should be detailed in order to be explainable and understandable, posting, ledger should contain all assets, and accounts charts. In order to ensure that the data entered in the account it correct there is a trial balance and locating errors (Weygandt, 2010).

The idea of credits and debits can be confusing this is because the concept has a clearly different meaning as they have no relationship meaning with other terms. There are also items of double entry in the bookkeeping system which tends to be confusing (Weygandt, 2010). The accounting equation of assets= liabilities + the owners Equity can be rearranged in different forms which might as well be confusing (Weygandt, 2010). There is also a confusing element of different treatments of transactions of the same class, for instance, a bank account differs in its entry from the owner’s perspective to that of the bank. It is true to say that accounting requires determination in order to know the bookkeeping process to ensure that the financial statements produced are a true and a fair reflection of a business.

Reference

Weygandt, J. J. (2010). Accounting principles: Vol. 1. Hoboken, N.J: Wiley.

Global factors impact on marketing strategy

Marketing decision must consider the various global factors while developing marketing strategies in order to improve on the performance of a firm. The global factors affect the business environment in which the firm operates in as much they have to withstand competition in their industry. Globalization has affected the marketing strategies of the firm in that it has helped in the expansion of the market, hence a marketing strategy can reach out to a great pool of customers.  It offers an opportunity for a firm to access new markets by means of establishing relationship with customers, strategic partners or parties in a value chain. In addition, a firm can be able to establish strategic alliances with its various competitors in a local or international market which helps the company in having a large customer base. When the global economies are good a marketing strategy can be utilized to increase the level of sales while at the same time developing competitive advantage over other competitors (Thoumrungroje, 2004).

However, this factor can pose various threats to a firm, which relates to increased competition from other organizations that can access the same environment. Globalization leads to liberalization of markets, creating   new and challenging competitive arena. This means that a firm that is unable to develop an effective marketing strategy can face the cut-throat competition posed by multinational firms that have a big advantage due to large capital base and technological support. This creates a business environment which is very challenging, and which affect market opportunities and threats (Thoumrungroje, 2004). An example of the global factors is the liberalization of global economies by governments.

References

Thoumrungroje, A. (2004). The effects of globalization on marketing strategy and performance. Retrieved from:

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.629.6471&rep=rep1&type=pdf

Budget justification

This is a budget that has been designed to cater for every expense in the course of the overdose prevention intervention. The estimates are considerably within the range of realism considering how the previous intervention budgets the research team had incurred. Justification of every expense has been made as follows.

Personnel expenses: the project coordinator is an expert international leader in fighting drug and substance abuse and hence his high rank is worth the $70, 000 throughout the intervention. The other researchers have been assigned salaries based on the magnitude of duty they hold, the level of education and the agreements that were made during the preparation period. Office supply shall spend $3, 200 which is a considerable amount considering the duration and time that writing and printing shall be used.

Equipment: Since the department does not have all the necessary equipment, 4 laptops, a van and the other included equipment shall be hired. Their prices were confirmed to be as they are in the budget.

Incentives/Promotions: After a lengthy discussion with the project committee members, it was found that online advertising would not pass the information efficiently as we would desire. In this regard, pamphlets, posters and other printouts had to cost $16, 100 for full awareness and reward to the participants. In addition, postage envelops and survey copies were found useful in the intervention.

Transport expenses: We also had to hire a park pavilion which would be large enough to accommodate the expected large number of participants.

Purchasing services: The purchase services were estimated to equal the previous intervention project which amounted to $1, 450.

Project sustainability plan

Mission

The project team is looking forward to have a discussion with community members and staff on the need to embrace the overdose prevention methods that will be proven effective during the intervention.

Goals

The team will also develop logic and specific model of sustainable goals towards overdose prevention.

Relation and involvement of key stakeholders

 The team members will closely work with the leadership schools and faith communities in order to uphold the banner of ‘no to overdose’. For the purpose of building the relations with the leaders and teachers, regular meetings shall be conducted with them and the community members.

Awareness

Written materials shall also be distributed to participants for them to understand the vision and mission of the project team.

Project funding

Finance sustainability of the project on future interventions is dependent on personal contributions, support from government health agencies, fundraisers and sponsors. In addition financial strategies shall be developed by the advisory and staff committee to ensure that clarity and transparency of funds is made sustainable.

Being good stewards

Lastly, the sustainability plan calls all the members of the project to be good stewards of time and resources. Celebrations of the continued efforts will be made after every bit of the project shall have come into completion.

U.S. Economy

The US tax system an issue viewed to be complicated in terms of corporate tax code and lacking a territorial approach like other leading and developed countries. It is beset with problems which makes it ineffective in raising enough revenue for government expenditure. This is majorly observed with federal system of taxation that failed to raise sufficient finances to fund the federal government expenditure. In fact, the government debt has continued to rise over the last decade under the Obama administration which shows that the deficit in federal government spending is always increasing. The constant federal deficit and national debt is a major economic issue that is in the mind of United States public that bears the burden (Rubin & Timiraos, 2016). The overall result of the current US tax system is failure to produce positive economic growth and fairness between the rich and ordinary folks.  

There is a need t to introduce tax reforms aimed at increasing the amount of tax collection in order to lower the tax deficit which leads to higher national debt.  The tax system should focus creating an enabling business environment that allows economic growth by reducing the interest rates. The system should also consider increasing taxes especially for the rich class so as to cater for the deficit and at the same time not burdening the low income tax payers (Stepanyan, 2003). Reforming the tax system to enhance growth is the better option in this case since it will widen the tax base.

The federal government should encourage a taxation system that translates into lower interest rates to encourage economic growth. The system will manage to pay government spending, treat all the tax payers fairly and put in place incentives for productive activity. The state and local governments should relax policies that make the business environment unfavorable (Rubin & Timiraos, 2016).

Reference

Stepanyan, V. (2003). Reforming Tax Systems: Experience of the Baltics, Russia, and Other Countries of the Former Soviet Union. Washington: International Monetary Fund.

Rubin, R., Timiraos, N. (2016).Is the Federal Budget Deficit an Urgent Problem? Retrieved from: http://blogs.wsj.com/economics/2016/10/20/is-the-federal-budget-deficit-an-urgent-problem/