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 differently. The definitions of the [...]
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 abilities of the subjects, adds [...]
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 income diminishes. Also, the higher [...]