Revenue Sharing

Revenue sharing is the sharing of profits and losses between the general partner(s) and limited partners in a limited partnership. More generally, it refers to the practice of sharing profits with a company's employees, or between companies in a business alliance.

Revenue sharing, as it pertains to the United States government, was in place from 1972-1987. Under this policy, Congress gave an annual share of the federal tax revenue to the states and their cities, counties and townships. Revenue sharing was extremely popular with state officials, but it lost federal support during the Reagan Administration. Revenue sharing was ended in 1987 to help narrow the national government's deficit. In 1987, revenue sharing was primarily replaced with block grants.[citation needed]