Modern principles of taxation. Economic Principles - Taxes and Taxation

Modern principles of taxation. Economic Principles

Developed in the XVIII-XIX centuries. and specified in the XX century. taking into account the realities of economic and financial theory and practice, the principles of taxation are currently formed in a certain system. This system of principles can be combined into three directions of taxation (Figure 2.1).

Modern principles of building a tax system

Fig. 2.1. Modern principles of building a tax system

Let's consider in more detail the economic principles of taxation, which are shown in Fig. 2.2.

Economic principles of taxation

Fig. 2.2. Economic principles of taxation

First of all, in the series of economic principles, it is necessary to distinguish the principle of equality and/or equity. According to this principle, the distribution of the tax burden must be equal and each taxpayer must contribute a fair share to the state treasury . All legal entities and individuals must take a material part in financing the needs of the state commensurate with the incomes received by them under the auspices and with the support of the state. Simultaneously, the taxation should be universal and evenly distributed among taxpayers. Equity and fairness of taxation should be provided in two aspects: vertical and horizontal.

Based on the principle of equality and fairness in the vertical aspect , taxes should be levied in strict accordance with the material capabilities of a particular taxpayer. Under equality and fairness A. Smith understood taxation exclusively on a proportional basis, i.e. tax collection is commensurate with the income or property of the taxpayer. Otherwise, it could not be, if we recall the system of taxation that dominated then in the countries of Western Europe. Its basis, as you know, at that time was indirect taxes, with the main taxation accounted for by basic necessities. In other words, at that time there actually existed a regressive scale of taxation: the more a taxpayer had, the smaller share of the tax he paid. The poorer sections of the population, on the contrary, paid a much larger share of their income in the form of taxes when buying salt, bread, sugar and other essential goods. Thus, the ideas of A. Smith on equality and justice at that time were exceptionally progressive and rather bold. Modern understanding of this principle is treated differently than in the days of A. Smith: with greater income, a greater tax should be paid. Thus, modern tax systems are based mainly on progressive taxation of income, and often - and capital. At the same time, taxpayers who receive more material or other benefits from the state should pay more taxes.

According to the principle of equality and fairness in the horizontal aspect , taxpayers who are in an equal position should be treated in the same way by the tax legislation; payers with the same income must be taxed at the same rate.

In world practice, there are two approaches to the realization of the principle of equality and justice. The first approach is to ensure the benefit of the taxpayer. According to this approach, the taxes payable correspond to the benefits that the taxpayer receives from the services of the state, i.e. the taxpayer is returned part of the paid taxes through payments from the budget, various kinds of compensation, transfers, financing of education, health care and other social costs. Thus, in this case, there is a connection between this approach and the structure of budget expenditures.

The second approach in the implementation of the principle of equality and fairness is the ability of the taxpayer to pay taxes. In this case, this approach is not related to the structure of budget expenditures. Everyone pays their share depending on their ability to pay.

In the construction of global tax systems, these two approaches are usually combined, which provides the most favorable conditions for the implementation of this critical principle of building a tax system.

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