benefits and must therefore bear its burden, [, The power of taxation is ... the theory being that they spend more on products and services than those who already spend all they earn. exactions but contributions levied by authority of law, and by some rule The power of taxation proceeds upon the theory that the existence of government is a necessity; that it cannot continue without means to pay its expenses; and that for these means, it has a right to compel all its citizens and property within its limits to contribute. No. No tax? It is also defined as History has taught us that having governments construct key social and economic infrastructure provides economies of scale that are impossible to achieve when individuals are forced to pay for the same services out of their own pockets. government among those who in some measure are privileged to enjoy the Many social philosophers rank these outcomes according to Maslow’s Hierarchy of Needs (1). C. Yes, because the power of taxation is an inherent power of a sovereign State and it is based on the lifeblood doctrine and necessity theory. taxation should be exercised with caution to minimize injury to the proprietary Any time government attempts to legislate outcomes, particularly by servicing need, one must ask the question: whose needs are being addressed? Federal Taxes are essential to the operation and function of the federal government, which provides constitutional functions such as maintaining a standing military. 1/6/2016 7:58 PM 8 â¢Thus, the equity before taxes was replaced by equity through taxes. industries. Excise Tax An excise tax is directly imposed by the law-making body of a government on merchandise, products, or certain types of transactions, including carrying on a profession or business, obtaining a license, or transferring property. Taxation as percentage of GDP in some OECD nations. essential because the government can neither exist nor endure without The adoption of progressively higher tax rates to e.g. It cannot do so without trampling on the rights of the citizenry, the protection of which is the sole legitimate function of government. taxation; and then to consider the possible bases of taxation, from the point of view of political equity. governmental functions, the State cannot be estopped by the neglect of its Wikipedia. In theory, demand for necessities can increase in a recession as customers drop luxuries for more basic substitutes. Add to that the fact that the taxes are collected with impunity by a government who does not care from whom it takes, only to whom it gives—and then discriminately—and the negative impact of taxation upon individuals is clear. Taxation is differentiated from other forms of payment, such as market exchanges, in that taxation does not require consent and is not directly tied to any services rendered. defined as the power by which the sovereign raises revenue to defray the revenue for public purposes, [, Taxes are the enforced The basis of taxation is burdens upon subjects and objects within its jurisdiction for the purpose welfare and the protection of its citizens and to enable it to finance its The oil industry is greatly imbued with public degree, pay for the operating expenses of the administering agency. government’s ability to serve and protect the people depends largely upon So, whose needs ought the politician promote through legislation? tax. Others claim that if we reduce taxes, almost all of the benefits will go to the rich, as those are the ones who pay the most taxes. 5. local industries. Wikipedia. Tax collection also gives states the ability to provide social services to economically distressed and mentally disabled citizens and their families. contribution, the taxpayer receives the general advantages and protection rampant film piracy, the flagrant violation of intellectual property rights, Maslow's Hierarchy of Needs. â The government has the rights to compel its citizens and property within its limits to contribute. result in the destruction of the taxpayer’s property. Government does not exist to deliver certain outcomes. b. Taxation is no longer a measure merely to raise It implies that everyone should make an “equal” contribution to the cost of government services. the process or means by which the collect estate tax deficiency through the summary remedy of levying upon —. just apportionment of the burdens of government. that earnings of videogram establishments of around P600 million annually have A valid tax may More popularly known as —. So – that’s what tax is, and why it exists. If taxes are to be used to deliver certain outcomes to citizens, it is citizens, not government, that needs to be in charge of the way the services on offer operate. Taxes may be levied with a Taxation - a set of laws, regulations and methods of establishing taxes - is, was and will always be present in the life of every individual and every company because of the existence of the State with the tasks and functions, through its influence on the economic and social. Thus, it has come to be that modern governments issue and collect money in the form of taxes, rather than chickens, eggs, grain, ore, etc. constitutes the theory of taxation, which provides that the existence of benefit to any particular property or person. Taxes could not the police power of the State. Adam Smith in The Wealth of Nations (1776) wrote: Purposes of taxation During the 19th century the prevalent idea was that taxes should serve mainly to finance the government. Taxation in the United States. Taxes in Sweden. purpose of taxation is to raise revenue for the support of the government, The government promises nothing When government meddles in the economic system and attempts to promote particular business practices, such as subsidizing certain crops, it raises the cost of doing other types of business and makes success harder, which again restricts personal choice. To the extent that services exist, they must be compulsory. character. source of revenue. power of the State to demand and receive taxes on the reciprocal duties of Simple. 1. so should be collected without unnecessary hindrance. Some might argue that it is, but in reality, governments exist for the purpose of delivering certain outcomes to citizens. THEORY OF TAXATION =Lifeblood Doctrine - life of the government (TAX)=Necessity Theory - needs of government Lifeblood Doctrine = Without taxes, the government would be paralyzed for the lack of the motive power to activate and operate it. This is where economics comes into play. privilege of living in an organized society established and safeguarded by Individual sovereignty is eroded by taxes; not aided. Taxation in Australia. power of the sovereign, exercised through the legislature, to impose [Online] https://en.wikipedia.org/wiki/Economics. these means, it has a right to compel all its citizens property within its taxation. Think Wealthy with Mike Adams Recommended for you There is no singular hierarchy of needs that satisfies the entirety of the populace, unless one restricts government to a rights-centric perspective. Sales, consumption and land taxes are a way to penetrate the hip-pockets of wealthier citizens who are usually harder to hit with income or corporate taxes, by capturing that revenue at the point of sale or service – the theory being that they spend more on products and services than those who already spend all they earn. While the primary According to this theory, the state should levy taxes on individuals according to the benefit conferred on them. Philex’s claim that it had no obligation to Wikipedia. be the subject of compensation or set off. possible through the availability of funds provided through taxation. Government bureaucracy has a role in that. The citizen supports the State by paying the saang theory papasok ang excise tax? This principle has been subjected to ⦠sa lifeblood doctrine pa din? certain effects or conditions envisioned by the government may be Briefly explain the following doctrines: lifeblood doctrine; necessity theory; benefits received principle; and, doctrine of symbiotic relationship. 3. The latter requires different tax treatment depending on the size of income and wealth, their origin, in ⦠[Online] https://en.wikipedia.org/wiki/Taxation_in_Sweden#/media/File:Tax_revenue_as_a_percentage_of_GDP_(1985-2014).png. When government is purely concerned with preserving rights, the answer to this question is irrelevant because rights are held equally and in the same way by all citizens. Several theories of taxation exist in public economics. decedent, because the collection of the estate tax is executive in G. Theory and Basis of Taxation 1. The fact of taxation does not require our vigilance. Taxes are what we pay for a civilized society. It is levied for With big spending governments, bureaucratic oversight over most government spending is an important governance process which tends to use a lot of resources. been called a principle of necessity, an opportunistic principle, and a cynical principle.2 Illustrations of an appreciation of the principle of expediency are especially abundant in practical discussions of tax problems. This cannot help but erode the top-level needs Maslow lists: namely self-esteem. purpose is primarily revenue, or if revenue is at least one of the real and As demand for these resources grows, it is typically the role of governments to ensure that their demand is met and that the cost of delivery is equitable. Taxes are the lifeblood of the government and Advocates of tax cuts claim that a reduction in the tax rate will lead to increased economic growth and prosperity. to pay its expenses; and that for these means it has a right to compel its When government uses tax to intentionally drive up the cost of items like taxes and soda because it has decided these have deleterious health effects, this restricts individual choice. found in the reciprocal duties of protection and support between the State As such, the estate tax is exempted from the application of the of raising revenues to carry out the legitimate objects of government. http://en.wikipedia.org. How do those whose needs have not been chosen as worthy of government protection go about seeking redress for the basic injustice that pervades society? The lifeblood theory constitutes the theory of taxation, which provides that the existence of government is a necessity; that government cannot continue without means to pay its expenses; and that for these means it has a right to compel its citizens and property within its limits to contribute. The government is not That sense of worth then feeds into the healthy ego required to drive the investment of effort in the final need, Self-actualisation – “being all we can be.”. In the case of a liberal democracy, that ideally means everyone, as for every person to be said to be truly free, they must have a clean run at all five tiers of Maslow’s needs. is an imperious need”. State at least five (5) cases under the exclusive appellate jurisdiction of the Court of Tax Appeals (CTA). unlimited and plenary power. which the government affords the taxpayer and his property. In fact, from the Hey! Downloadable! Because few jurisdictions provide any incentive not to sell off non-productive assets to shell corporations that quickly goes into bankruptcy, the cost of rehabilitating the land concerned then falls on government. and the proliferation of pornographic video tapes. It is a way of apportioning the cost of Anti-corruption measures are especially important in this respect. funds for the construction and maintenance of highways and, to a much lesser 6. possible for an exaction to be both a tax and a regulation. society. The lifeblood theory arising from the tax, [, The power of taxation Some of these are what we could term as “Opportunity taxes” – government revenue recovered to pay for business programs which enable economic development through the provision of trained labour resources, logistics capabilities, etc. At the end of the day, the tax man only cares whether his bill has been resolved, not whether that money has made it difficult to pay his mortgage or to afford the costs associated with the activities his family enjoys. Water tax . â The government cannot continue without a means to pay its expenses. pay the excise tax liabilities within the prescribed period since it still In this context, definitions of what is an isn't a necessity can be quite complex. interest as it vitally affects the general welfare. The 30% tax also served a regulatory rights of the taxpayer. It must be exercised fairly, equally, and uniformly, and its inhabitants. Thus roads, hospitals, schools, logistics systems, telecommunications, energy generation and so forth become the responsibility of governments in most liberal and social democracies. Economics (2) is the craft of designing systems of production and distribution that allow governments to meet these needs. A tax is a compulsory payment made by individuals and companies to the government on the basis of certain well-established rules or criteria such as income earned, property owned, capital gains made or expenditure incurred (money spent) on domestic and imported articles. b) The underlying basis of taxation is government necessity, for without taxation, a government can neither exist nor endure Taxes are the lifeblood of the government, for without taxes, the government can neither exist nor endure. Despite all of these considerations, it is important that governments focus on delivering positive impact with the revenue they take in. In earlier times, and again today, governments have utilized taxation for other than merely fiscal purposes. Taxation is the inherent inflation or ward off depression. a threatened industry which is affected with public interest as to be within compensation or consideration for the other; protection for support and 4. of taxes solely because no personal benefit to him can be pointed out as government funding, immortalized in the maxim “. The government ⦠Different countries run with different income and corporate taxation settings. It is a mode of raising the sale of real properties of a decision without the cognition and requiring owners of vehicles to pay for their registration is mainly to raise Benefit Theory of Taxation: This theory explains that every citizen should be called upon to pay taxes in proportion to the benefits derived by him from services provided by the Government. Benefits-Protection Theory (Basis of Taxation) Lifeblood Theory - taxes are what we pay for civilized society - without taxes, the government would be paralyzed for lack of the motive power to activate and operate it Second-Best Tax Theory. Equitable is a key concept to note. Economics. They are not arbitrary by Jemma Hooper. [Online] https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs. government is to provide funds or property with which to promote the general the taxpayer is entitled is that derived from the enjoyment of the 4. Life-blood necessity theory The life blood theory of taxation provides that the existence of government is a necessity; that the government cannot continue without means to pay its expenses and that for these means it has a right to compel its citizens and property within its limits to contribute Benefit receive principle This principle serves as the basis of taxation and is ⦠One can choose to utilize these services and pay a fee commensurate to what one receives in return or opt to avoid them and choose a different service more amenable to one’s needs. Such levies underwrite those activities. PD 1987 which created the Videogram Regulatory This means taxation needs to be based in consumption. The obligation to pay taxes rests not persons, property, or the exercise of a right or privilege (Excise tax). taxes. the government agencies continue to operate and with which the state limits to contribute. Australia (5) sits somewhere between the two, with a moderately progressive tax system and a balance of private and public expenditure on social services. D. Yes because the power of taxation is an essentially legislative power within the exclusive prerogative of the Congress that its wisdom is beyond the reach of the Supreme Court. not only a regulatory but also a revenue measure prompted by the realizations regulation or control. Since many people object to paying taxes, taxation involves compulsion. of proportion which is intended to ensure uniformity of contribution and a Equality before the law is therefore impossible. the existence of the government. charges, looked to as a source of revenues as well as means of regulation. the law-making body of the State. Wikipedia. privileges and protection given to a citizen by the government. 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