Tag Archives | Tax

Favour and Against Proportional Taxation

After reading this article you will learn about the arguments in favour and against proportional taxation. Arguments in Favour of Proportional Taxation: Proportional taxation has been advocated by the classical econo­mists as a protest against the injustice of the old system of exemp­tions and privileges. Adam Smith, stating that taxation should be adjusted to the […]

Merits and Demerits of Progressive Taxation

After reading this article you will learn about the merits and demerits of progressive taxation. Merits of Progressive Taxation: Progressive taxation has been universally accepted as the best sys­tem of taxation. It is based on the application of principle of diminish­ing marginal utility of income and ability to pay. As income increases, marginal utility of […]

Incidence and Shifting of Tax: 12 Factors

This article throws light upon the twelve main factors determining the incidence and shifting of tax. The factors are: 1. Elasticity of Demand 2. Elasticity of Supply 3. Price acts an Engine of Shifting 4. Tax Area 5. Time Period 6. Coverage of Tax 7. Availability of Substitutes 8. Nature of Demand for Commodities 9. […]

Tax: Characteristics, Objectives and Canons

After reading this article you will learn about:- 1. Definition and Characteristics of Tax 2. Objectives of Taxation 3. Principles. Definition of Tax: In every country major part of the revenue is raised through taxation. According to Prof. Taylor “Taxes are compulsory payments to gov­ernments without expectations of direct return or benefit to the tax […]

Concept of Optimal Taxation: 3 Criterions

This article throws light upon the three main criterions for defining the concept of optimal taxation. The criterions are: 1. Minimization of Resource Cost 2. Equity Criteria 3. Efficiency Criteria. Criteria # 1. Minimization of Resource Cost: A tax system usually involves cost of collection to the authorities and a resource cost to the taxpayers. […]

Equitable Distribution of Tax Burden: 3 Principles

This article throws light upon the three main principles for equitable distribution of tax burden. The principles are: 1. The Cost of Service Principle 2. The Benefit Principle 3. Ability to Pay Theory. 1. The Cost of Service Principle: This principle suggest that the cost incurred by the government in providing public goods to satisfy […]

Taxable Capacity of a Nation: Meaning, Significance and Limits

After reading this article you will learn about:- 1. Meaning and Definitions of Taxable Capacity 2. Types of Taxable Capacity 3. Significance 4. Factors 5. Measurement and Limit. Meaning and Definitions of Taxable Capacity: Taxable capacity is a highly misleading and controversial concept in the theory of taxation. Different writers tried to define this concept […]

Shifting Process of Various Taxes

After reading this article you will learn about the shifting process of various taxes. 1. Taxes on Income: The individual income tax apples to earnings originating in all sec­tors of the economy. Taxes on income are of two types. Firstly taxes on the net income of individuals and secondly taxes on net income of business […]

Incidence of Tax in the Real Life (With Diagram)

After reading this article you will learn about the incidence of tax in the real life. The main principles of the theory of incidence are condensed by Dalton to form a general preposition of the theory of incidence of taxation. In the real market situations, most commodities have de­mand and supply curves which are less […]

Classification of Taxes: 4 Types

This article throws light upon the four main types of taxes charged on taxpayers. the types are: 1. Direct and Indirect Taxes 2. Proportional, Progressive, Regressive and Degressive Taxes 3. Specific and Ad-Valorum Duties 4. Value Added Tax (VAT). Type # 1. Direct and Indirect Taxes: On the basis of assessment, rather than on the […]

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