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Questions and Answers
Which of the following is NOT one of the inherent powers of the state mentioned in the text?
Which principle is NOT considered a basic principle of a sound tax system?
Which theory of taxation views taxation as the 'lifeblood' or necessity for government operations?
What is the scope of taxation as described in the text using the acronym CUPS?
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Which element is NOT considered essential for a tax to be valid based on the text?
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Which aspect of taxation involves determining the amount of tax due from each taxpayer?
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According to constitutional limitations mentioned in the text, what is prohibited regarding taxation and imprisonment?
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In terms of classification based on the rate applied, what does a 'progressive tax' mean?
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What is one way mentioned in the text that could be used to avoid paying taxes?
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Study Notes
- Municipal or Local Taxes: Classified based on who bears the burden and rate applied
- Direct Tax: Borne by the taxpayer directly
- Indirect Tax: Burden is shifted to someone else during a transaction
- Proportional Tax: Rate applied is proportional to taxable income or value
- Progressive Tax: Rate increases as income or value increases
- Construction of Tax Laws: Prospective, but can be retrospective, not political in nature, etc.
- Shifting: Transfer of tax burden to someone else, only applies to indirect taxes
- Capitalization: Increasing property value without selling it
- Tax Exemption: Freedom from tax burden for certain entities and uses
- Territorial Limits: Taxing power has geographical boundaries
- Public Purpose: Taxes must serve a public need
- Exemption of Government, Political Subdivisions, or Agencies: Performing purely governmental functions are exempt
- Non-Delegation Doctrine: Taxing power cannot be delegated except in certain cases
- Double Taxation: Taxing the same subject, taxing authority, jurisdiction, and period is not allowed
- Inherent Powers of the State: Police Power, Eminent Domain, Taxation
- Police Power: Indispensable to government existence, interferes with private rights, generally exercised by the legislature
- Eminent Domain: Authorizes the government to take private property for public use, with compensation
- Taxation: Another inherent power, interferes with private rights, generally exercised by the legislature
- Lifeblood or Necessity Theory: Justifies taxes as necessary for government functioning
- Benefits Protection Theory: Taxes are justified based on the benefits received by taxpayers
- Comprehensive Scope of Taxation: Taxes cover all sources of income and property
- Uniformity and Equity in Taxation: Constitutional requirement for fair taxation
- Fiscal Adequacy: Adequate revenue is necessary for government functioning
- Equality or Theoretical Justice: Taxes should be fair and just
- Administrative Feasibility: Taxes should be easy to collect and administer
- Enforced Contribution: Taxes must be paid under threat of penalty or imprisonment
- Generally Payable in Money: Taxes must be paid in monetary form
- Proportionate in Character or Uniform: Taxes should be equal for similar taxpayers
- Exacted Pursuant to Legislative Authority: Taxes must be authorized by law
- For Raising Revenue for Public Purpose and Needs: Taxes must serve a public purpose.
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Description
Test your knowledge on the classification of taxes based on who bears the burden and the rate applied, as well as the construction of tax laws including prospective and retrospective application. Explore different types of taxes and rules for interpreting tax laws.
