Principles of taxation

Principles of Taxation - Hosbeg. What are the main two principles of taxation? What is the theory and basis of taxation? Distribution of tax burdens.

Various principles , political pressures, and goals can direct a government’s tax policy.

The ability-to-pay principle. Maximum freedom of choice , consistent with the welfare of others. Other articles from economicsdiscussion. Taxation , imposition of compulsory levies on individuals or entities by governments.

Taxes are levied in almost every country of the worl primarily to raise revenue for government expenditures, although they serve other purposes as well. This article is concerned with taxation in general, its principles , its objectives,. Flexibility: Any good tax system has to be flexible in nature.

According to John Stuart Mill, the four principles of taxation are that the system be efficient, understandable and equitable and those who benefit from publicly-provided services should sponsor and pay for those services through taxes. Actually, proportional taxation is traditionally American. While the principle of absolute equality has sometimes prevaile the equality of rate or proportional principle has usually been fol­lowed.

A good tax system follows the four principles of taxation. Taxes on real and personal property are current examples. Definition of taxation principles : Basic concepts by which a government is meant to be guided in designing and implementing an equitable taxation regime. These include: (1) Adequacy: taxes should be just-enough to generate revenue. By equality is meant equality of sacrifice, that is people should pay taxes in proportion to their incomes.

This principle points to progressive taxation. Taxation should be elastic in nature in the sense that more revenue is automatically fetched when income of the people rises. These principles include the following: Broad application.

The system of taxation should be spread across a broadest possible population, so that no one person or entity is unduly taxed. The social security tax is a com­bination of equal and proportional. The tariff tax has always been in proportion to the amount im­ported.

Fairness, in that taxation should be compatible with taxpayers’ conditions, including their ability to pay in line with personal. Importado CPA, MBA 2.

Discuss the purposes of taxation. Identify the theory and basis of taxation. PRINCIPLES OF TAXATION 2. TAXATION - Is the inherent power of the sovereign, exercised through the legislature, to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues to carry out the legitimate objects of government. TAXES- are the enforced proportional. Paper TCTaxation is a paper that is discursive and requires computation.

As a result the exam has both narrative and computational questions. The Government should follow the canons of taxation propounded by various economists for efficient economic administration. Among canons of taxation discusse Adam Smith propounded the following first four canons of taxation – (1) Canon of Equity.

It implies that tax should be Levied on citizens on the basis of equality.