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 point of assessment, taxes are [...]
This article throws light upon the top four theories of tax shifting. The theories are: 1. Concentration Theory 2. The Diffusion Theory 3. Demand and Supply Theory of Incidence 4. Musgrave’s Approach. Tax Shifting # 1. Concentration Theory: This theory was advocated by the physiocratic school of thought in France during the middle of the 18th century. Physiocrats believed that [...]
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 [...]