I would assume that governments estimate the amount of extra money they need to finance public healthcare, pensions, infrastructure improvements, etc. They make the projection for the coming years, add some safety gap on top and then calculate the tax rate based on this required amount of extra income. Is that true?
If so, such calculation leads us to a flat tax rate. If we are talking about a progressive tax, how are the decisions about tax bands and rates for each band made?
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What you describe is more along lines of how local property taxes are calculated… figure out budget amount needed and then divide by assessed valuations. Income taxes are more estimates, and the federal government can also issue bonds (debt) to cover shortfalls in revenue (while increasing the overall debt with the deficit spending)
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