Tax classification by applied rates
Depending on the applicable tax rates, taxes are subdivided into progressive, regressive and proportional. The general classification of tax rates is shown in Fig. 3.3.
Depending on the object (object) of taxation, tax rates can be firm (specific) or percentage (ad valorem).
Solid rates are set in absolute terms per unit of tax, regardless of the amount of income or profit. These rates are usually applied for the imposition of land taxes, property taxes. In the United States tax legislation, such rates are widely used also in the imposition of excise tax.
Interest rates are set to the value of the object of taxation. Both firm and interest rates can be proportional, progressive and regressive. Proportional rates act in the same percentage to the object of taxation. An example of a proportional rate can be, in particular,
established by United States law rates of taxes on profits, value-added, on income of individuals.
Progressive rates are constructed in such a way that the size of the increase in the value of the object of tax increases. In this case, the progression of tax rates can be simple and complex.
In case of applying a simple progression, the tax rate increases as the entire object of taxation grows. When applying a complex rate, the object of taxation is divided into parts, with each subsequent part being subject to an increased rate. A striking example of the progressive interest rate in the United States tax system was the personal income tax rate that existed before 2001. The entire amount of the annual cumulative taxable income of citizens was divided into three parts. The first part (up to 50 thousand rubles.) Was taxed at the rate of 12%, the second part (from 50 thousand to 150 thousand rubles.) - at a rate of 20% and the third part (more than 150 thousand rubles.) - at a rate of 30 %. Currently, progressive tax rates in the United States tax system apply to the transport tax and property tax.
Regressive tax rates decrease with income.
In the United States tax legislation, these rates were established on the unified social tax introduced since 2001 and canceled from 2010.
Under content tax rates are divided into three types: marginal, actual (average) and economic. Marginal are the tax rates that are given in the tax legislation. Actual tax rates are the ratio of the amount of tax paid to the value of the tax base. Economic rates are defined as the ratio of the amount of tax paid to the amount of all income received.
Tax rates in our country for federal taxes are set by the federal law - the US Tax Code. The rates of regional and local taxes are set according to the laws of the United States entities and regulatory legal acts of representative bodies of local self-government.
At the same time rates of regional and local taxes can be set by these bodies only within the limits fixed in the federal law for each type of taxes.
Classification of taxes on other grounds
The classification of taxes on the subject of payment is to some extent conditional, since along with the grouping of taxes paid by both legal entities and individuals, there is a group of taxes levied simultaneously from individuals and legal entities. Such, in particular, are taxes on land.
Important for the formation of the state budget system is the grouping of taxes by belonging to the links of the budget system. In this case, they are divided into fixed and regulating. To fixed are taxes that are permanently legislated for budgets of the appropriate level, for example local taxes, which are permanently assigned to local budgets. Regulatory taxes are taxes, the proceeds of which are distributed between the levels of the budget system according to the norms established for a year or on a long-term basis. In the United States tax system, this is almost all federal and regional taxes.
According to sources of taxation, as the name implies, taxes are divided depending on which source they are paid from. Some taxes are paid at the expense of the total income of the taxpayer, the source of payment of others may be profit, the costs of paying a third are either the costs of production and circulation, or a decrease in financial performance. The source of payment of each tax is established by law.
In practice, taxes are often divided depending on their use. In this case, they are divided into general (they are sometimes called abstract) and special. To general is the majority of taxes levied in any tax system. Their distinctive feature is that after they enter the budget of any level, they are depersonalized and spent for the purposes determined in the corresponding budget. In contrast, special taxes, having a strictly designated purpose, are assigned to certain types of expenses. Typically, special taxes are formed by state off-budget funds.
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