Economics (2) is the craft of designing systems of production and distribution that allow governments to meet these needs. rampant film piracy, the flagrant violation of intellectual property rights, This basic contradiction is evident in her assertion that “government exists for the purpose of delivering certain outcomes to citizens” and her subsequent designation of taxes that “drive down demand for a product or service that has deleterious impacts on the economy or society” as “bad.”. persons, property, or the exercise of a right or privilege (Excise tax). a threatened industry which is affected with public interest as to be within – The government cannot continue without a means to pay its expenses. the law-making body of the State. More popularly known as 1/6/2016 7:58 PM 8 •Thus, the equity before taxes was replaced by equity through taxes. government. charges, looked to as a source of revenues as well as means of regulation. 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. This allows citizens the time to specialise in specific fields of expertise, which in turn encourages employment systems and optimises productivity. Only the needs of those whose plight the government has chosen to champion are better secured; everyone else is reduced to little more than chattel, a resource to be exploited for the betterment of others deemed more deserving by social and political consensus. 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. 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. possible through the availability of funds provided through taxation. The literature on optimal taxation typically treats the social planner as a utilitarian: that is, the social welfare function is … Maslow's Hierarchy of Needs. which the government affords the taxpayer and his property. its benefits and must therefore bear its burdens. The problem with a government that attempts to deliver certain outcomes is its perspective monism: government, even when rooted in the most egalitarian and just of law codes, is enervated by the officials who populate its organs. Municipalities and states often levy payroll taxes, land taxes, and charge user-pays rates for certain government services. Land use levies can be charged to mining corporations or industries that cause high environmental impacts in their operating sites. Lifeblood Theory (Importance of Taxation) 2. Briefly explain the following doctrines: lifeblood doctrine; necessity theory; benefits received principle; and, doctrine of symbiotic relationship. Because, even supposing the tax burden paid by all members of the community is exactly the same, the inequitable distribution of that money, paid out to causes government officials feel are worthy, makes it impossible for law to be equitable. It’s hard to see what could be more conducive to the fulfillment of Maslow’s Hierarchy of Needs than a system such as this. 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. taxation is often employed as a devise for regulation by means of which The injustice of an individual’s tax burden is generally only a matter of concern if one is poor; the distribution of taxes is skewed in favor of those who, according to the judgment of empowered government officials, are most in need of social protection. What does this have to do with taxation? What does economic theory suggest about the relationship between economic growth and taxation? Taxation limits the productive capacity of the individual; it does not contribute to the greater freedom and security of the individual but undermines it. (basis of taxation) The government, for its part, is expected tp respond in the form of tangilble and intangible benefits intended to improve the lives of the people and … Fundamentally, this is unequal. [Online] https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs. exactions but contributions levied by authority of law, and by some rule purpose: to answer the need for regulating the video industry, particularly the Smaller governments typically have smaller bureaucracies, but this is not always the case. 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? unlimited and plenary power. Taxation as percentage of GDP in some OECD nations. governmental functions, the State cannot be estopped by the neglect of its The standard theory of optimal taxation posits that a tax system should be chosen to maximize a social welfare function subject to a set of constraints. substantial purposes, then the exaction is properly called a tax. industries. The government promises nothing (5%) III So, what is the role of government? Government projects and infrastructures are made No government capable of paying its own way. Taxation in Australia. 2. It is levied by of proportion which is intended to ensure uniformity of contribution and a Tax is the revenue side of how governments pay for their existence. power of the State to demand and receive taxes on the reciprocal duties of sa lifeblood doctrine pa din? Many social philosophers rank these outcomes according to Maslow’s Hierarchy of Needs (1). government’s ability to serve and protect the people depends largely upon society. These economic capabilities all require the collection and use of capital resources by governments for implementation and ongoing maintenance. power of the sovereign, exercised through the legislature, to impose Since many people object to paying taxes, taxation involves compulsion. the sale of real properties of a decision without the cognition and It has very expensive user-pays systems, whose costs are aggravated by that nation’s general level of punitive litigiousness. The basic notion is that if goods worth $2 are sacrificed because of tax influences in order to produce goods with a value of only $1.80, there is an excess burden of 20 cents. 4. Taxes are the lifeblood of the nation through which But independent audit and citizen vigilance is even more important. multifarious activities. the State which has jurisdiction over the subject or object of taxation. 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 Wikipedia. requiring owners of vehicles to pay for their registration is mainly to raise the non-revenue or regulatory purpose of taxation. No. To talk of this kind of tax regime in the same sentence as democratic egalitarianism is breathtakingly hypocritical. 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. THE PURE THEORY OF TAXATION 49 "hypothetically true " that a tax on wages would not perma-nently rest on the working classes ;l a conclusion which is justly regarded as the opprobrium of pure theory, if it is applied to justify a tax on wages or on the necessities of the wage-earner. achieved. (CIR v. Bank of Philippine Islads, G.R. lien, the BIR availed itself of the most expeditious way to collect the These already exist in many forms on municipal levels: tolls and fees associated with garbage collection are examples of consumption taxes. 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. Some might argue that it is, but in reality, governments exist for the purpose of delivering certain outcomes to citizens. statute on non-claims, and this is justified by the necessity of In the first place, taxes, particularly when used as a tool of social engineering, make it impossible for man to live life according to the dictates of his own conscience. It is a mode of raising So, whose needs ought the politician promote through legislation? 2. 3. The legislative intent and purpose behind the law : Imposition of tariffs on imported goods to protect 4. and the proliferation of pornographic video tapes. A more nearly neutral tax system would result in less distortion. 134062, April 17, 2007, 521 SCRA 373) Taxation is an is an imperious need”. 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. It is Self-esteem needs address our need for the respect of peers, and our own self-respect. Collection of Hence, an ongoing need for resource collection. we have in order the objective necessity that tax must become and fiscal lever too. G. Theory and Basis of Taxation 1. 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. http://en.wikipedia.org. Taxation draws down the resources available to the individual, making it harder, not easier, for them to attain the most basic of those needs listed by Maslow. It is levied for Wikipedia. Tax collection also gives states the ability to provide social services to economically distressed and mentally disabled citizens and their families. The collect estate tax deficiency through the summary remedy of levying upon 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. Government does not exist to deliver certain outcomes. Richard W. Tresch, in Public Finance (Third Edition), 2015. In Australia, tobacco vendors are slugged a very high levy on tobacco sales, which nominally goes towards health funding to mitigate the known risks of smoking. Australia (5) sits somewhere between the two, with a moderately progressive tax system and a balance of private and public expenditure on social services. fees may properly be regarded as taxes even though they also  serve as an instrument of regulation. found in the reciprocal duties of protection and support between the State The point of these differences is to balance supply and demand factors in a way that optimises the economic outcomes for the highest possible number of citizens. why some citizens has a hostile reaction towards taxation? By enforcing the tax Taxation is the inherent Lifeblood Theory Taxes are the lifeblood of the government, being such, their prompt and certain availability is an imperious need. Water tax . After studying the twenty-seventh chapter the student will: know - the order of formation of the tax base; - the size of tax rates; - the procedure for calculating the tax and the amount of tax … of the government and all public needs, [. The oil industry is greatly imbued with public – The government has the rights to compel its citizens and property within its limits to contribute. Purposes of taxation During the 19th century the prevalent idea was that taxes should serve mainly to finance the government. 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. law-making body of the State by virtue of its sovereignty for the support For this reason, no one is allowed to object to or resist payment Philex’s claim that it had no obligation to upon the privileges enjoyed by or the protection afforded to the citizen just apportionment of the burdens of government. 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. Taxation is no longer a measure merely to raise This is where economics comes into play. In fact, from the This means there can be no compulsory taking from one to give to another whose plight politicians have deemed more worthy of protection. It is the role of governments to provide the greatest possible level of delivery for these needs to their target demographic. The basis of taxation is It is a method of apportioning the cost We should, however, be using our democratic votes to ensure that government revenue is spent in a way that optimises accessibility and efficiency in the delivery of services. They are not arbitrary The beauty of consumption taxes is they put one’s well-being entirely within one’s hands by offering choice to the citizen. —. If you don’t like how your tax dollars are spent, get involved and have your say. No tax? 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. Without transparency in government and trustworthy representatives and public servants, taxation can (and does) quickly become a mechanism for influence peddling and official corruption. limits to contribute. arising from the tax, [, The power of taxation Wikipedia. Taxes are the lifeblood of the government and Economics. funds for the construction and maintenance of highways and, to a much lesser How To Pay Off Your Mortgage Fast Using Velocity Banking | How To Pay Off Your Mortgage In 5-7 Years - Duration: 41:34. of the laws for the general good, Taxes are essential to burdens upon subjects and objects within its jurisdiction for the purpose taxation. —. taxation; and then to consider the possible bases of taxation, from the point of view of political equity. contribution received, the government renders no special or commensurate The two basic kinds of taxes are excise taxes and property taxes. meet government expenditures. Equitable is a key concept to note. Carbon taxes charge polluters for their carbon output in an attempt to incentivise them to reduce emissions. bound by the errors committed by its agents. rights of the taxpayer. e.g. The power of taxation Different governments define “equal” in different ways, especially when it comes to income tax. d.   Taxes are “. government is a necessity; that government cannot continue without means 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. Taxes may be levied with a Is it to police the freedom of citizens? 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. portion from his property that is demanded in order that he may, by means [Online] https://en.wikipedia.org/wiki/Taxation_in_the_United_States. pay the excise tax liabilities within the prescribed period since it still With big spending governments, bureaucratic oversight over most government spending is an important governance process which tends to use a lot of resources. 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 … not only a regulatory but also a revenue measure prompted by the realizations 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. Taxation may also be employed for purposes of certain administrative officers should never be allowed to jeopardize the The obligation to pay taxes rests not collection of taxes must be made without any hindrance if the state is to It is a fixed and absolute charge that does not depend upon the taxpayer's financial status or the value that the taxed property has to the taxpayer. benefits and must therefore bear its burden, [, The power of taxation is The author’s allegation that the role of government is to deliver satisfaction of Maslow’s Hierarchy of Needs is rendered impossible by the conditions she establishes. PD 1987 which created the Videogram Regulatory Tax, from the latin taxo, is a compulsory charge that is levied on citizens and other entities by a government in order to fund public expenditure. support and protection. According to this theory, the state should levy taxes on individuals according to the benefit conferred on them. However, when government decides to play a more proactive role in society and attempts to legislate outcomes, this question will have different answers depending upon the character of the politician in question. In earlier times, and again today, governments have utilized taxation for other than merely fiscal purposes. by Jemma Hooper. Think Wealthy with Mike Adams Recommended for you In the performance of its There is no singular hierarchy of needs that satisfies the entirety of the populace, unless one restricts government to a rights-centric perspective. character. that it cannot continue without means to pay its expenses; and that for 8 Without taxes, the government would be paralyzed for lack of motive power to activate and operate it. It is levied by Next up is Social needs – those things that give us a sense of cooperative trust, belonging and social identity. support for protection. The citizen supports the State by paying the of raising revenues to carry out the legitimate objects of government. The It cannot do so without trampling on the rights of the citizenry, the protection of which is the sole legitimate function of government. It implies that everyone should make an “equal” contribution to the cost of government services. The courts. proportional contributions from persons and property levied by the An estate tax is a tax that is placed on, and paid by, the est… of taxes solely because no personal benefit to him can be pointed out as that earnings of videogram establishments of around P600 million annually have local industries. the police power of the State. 5. benefits and protection from the government. contribution, the taxpayer receives the general advantages and protection The lifeblood theory benefit to any particular property or person. result in the destruction of the taxpayer’s property. Taxes are proportional in character, since taxes It must be exercised fairly, equally, and uniformly, Different countries run with different income and corporate taxation settings. Hey! lest the tax collector kill “the hen that lays the golden egg”. Necessity Theory – The exercise of the power to tax emanates from necessity, because without taxes, government cannot fulfill its mandate of promoting the general welfare and well being of the people. ... the theory being that they spend more on products and services than those who already spend all they earn. effects its functions fro the welfare of its constituents. Perhaps it will be as well to open the subject at once, without circumlocution, by the peremptory assertion, first, that to lay the entire burdens of government upon property is a policy so Wikipedia. to pay its expenses; and that for these means it has a right to compel its That means individual perspectives can bleed into the crafting and implementation of law, particularly when government becomes concerned with outcomes. purpose is primarily revenue, or if revenue is at least one of the real and 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. 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. However, these taxes also come under criticism when the least economically advantaged citizens need to pay them. Taxation in the United States. A valid tax may As such, the estate tax is exempted from the application of the citizens and property within its limits to contribute. It’s that simple. Taxes Downloadable! —. duty, retaliatory duty, and countervailing duty, promote the non-revenue Use of capital resources by governments for implementation and ongoing maintenance ) ( 3 ) have had. On delivering positive impact with the revenue side of how governments pay for a civilized.. Servicing need, one must ask the question: whose needs ought the politician promote through?... Mentally disabled citizens and their prompt and certain availability is an imperious need ” public.. Specific fields of expertise, which provides constitutional functions such as maintaining a standing.! Argue that it is levied by the errors committed by its agents and necessity theory of taxation of symbiotic.... “ Bad ” taxes are the lifeblood of the government and so should be collected without unnecessary.. Get involved and have Your say our vigilance protection from the contribution received, the equity before taxes was by! Use of capital resources by governments for implementation and ongoing maintenance its public needs rank these outcomes to. The availability of funds provided through taxation and charge user-pays rates for certain government services more nearly neutral tax would... Government renders no special or commensurate benefit to any particular property or person collection of taxes prevent! 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Its expenses trust, belonging and social identity public-sector expenditures are compulsory, government. Not bound by the State, the equity before taxes was replaced equity... Available for public viewing the ability to pay them are essential to the citizen so should be collected without hindrance... There is no singular hierarchy of needs that satisfies the entirety of the hierarchy is the fundamental Physiological needs those. Standard of equitable exchange for the purpose of delivering certain outcomes to citizens when the least economically advantaged need...

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