Connecting revenues and spending

It is highly desirable to be able to determine the flow of money from revenues to spending. For the most part, many taxes go into a general fund and many expenditures come out of that general fund, making this comparison moot. But in some cases, in many countries, there are taxes on certain behaviours that are used to fund specific items.

For example, a car registration fee might be used to fund the construction of roads and highways. This would be an example of a user fee, where the main users of the government service are funding it directly. Or you might have a tax on cigarettes and alcohol that funds healthcare grants. In this case, the tax is being used to offset the added healthcare expense of individuals taking part in at-risk activities. Allowing citizens to view what activities are taxed in order to pay for other expenditures makes it possible to see when a particular activity is being cross-subsidized or heavily funded by non-beneficiaries. It can also allow them to see when funds are being diverted or misused. This may not always be practical at the country level, as federal governments tend to make much larger use of the general fund than other local governments. Typically, local governments are more comprehensive with regards to releasing budget data by fund. Having granular, fund-level data is what makes this kind of comparison and oversight possible.