Fundamental Principles of Taxation

The government's authority to impose taxes overrides other powers, including the non-impairment clause of the constitution.

A mandatory payment that cannot be avoided.

Taxes are typically paid in monetary form, like dollars or euros.

Taxes are levied based on a proportion of the taxpayer's income, property, or activity.

The act of imposing a tax by the legislative branch.

Determining the exact amount of tax owed by each taxpayer.

A toll is a fee for using another's property, while a tax is a compulsory contribution to the government.

A penalty is a punishment for wrongdoing, while a tax is primarily for raising revenue.

Taxation is the process where a government imposes financial burdens (taxes) on individuals and businesses to raise revenue for essential services.

Taxation's primary purpose is to generate revenue, which the government uses to fund essential services like national defense, education, healthcare, and infrastructure.

The three inherent powers of the state are: taxation, police power, and eminent domain. These powers are essential for the state to function effectively.

This power allows the government to regulate and control individual actions and property for the public's welfare.

The power of the state to take private property for public use, even if the owner doesn't want to sell it.

Both powers are inherent, involve interfering with private rights, are exercised by the legislative branch, and often involve compensation for the impacted individual or entity.

Yes, the three inherent powers of the state exist independently of any constitutional provisions.

These powers are essential for a government to maintain order, protect the health and well-being of its citizens, and provide essential services.

A permit or license fee is imposed for regulation and is limited to the cost of regulation, while a tax is imposed for the support of the government.

Fringe benefits are forms of compensation provided by employers to employees in addition to their regular salary or wages. These benefits can range from basic items like health insurance and life insurance to more unique perks like free gym memberships or company-owned vehicles.

Employers offer fringe benefits to attract, motivate, and retain high-quality talent. Companies competing for highly sought-after skills often offer more generous benefits packages.

By default, fringe benefits are taxable unless specifically exempted by the Internal Revenue Service (IRS). Taxable fringe benefits are included in the recipient's taxable income for the year.

The IRS maintains a list of fringe benefits excluded from income taxes, including: accident and health benefits, achievement awards (up to $1,600), adoption assistance, athletic facilities, commuting benefits, de minimis benefits, dependent care assistance, educational assistance, employee discounts, employee stock options, employer-provided cell phones, group-term life insurance coverage, health savings accounts (HSA), lodgings on business premises, meals, no-additional-cost services, retirement planning services, tuition reduction, working conditions benefits.

Co-ownership refers to the joint ownership of an asset by two or more parties.

All earnings from wages, salaries, profits, interest, rents, and other sources. Used by lenders and landlords to assess risk, and forms the basis for calculating income taxes.

Total revenue minus the cost of goods sold (COGS). Used to analyze the performance of specific products or services.

Items that are considered taxable income. This includes compensation for services, income from trade or business, gains from property sales, and interest.

Income earned from working, including salaries, wages, commissions, fees, and tips.

For businesses selling goods, it's gross sales minus cost of sales. For service providers, it's gross receipts minus cost of service.

A legal and financial partnership where two or more individuals share ownership of a property. Each co-owner holds a specific percentage of the asset as outlined in the title.

A form of co-ownership where individuals hold an ownership interest, potentially with unequal stakes. Ownership shares often reflect initial financial contributions.

A type of co-ownership where co-owners share equal ownership with automatic rights of survivorship. If one owner dies, their share transfers automatically to the surviving co-owners.

A type of co-ownership that applies in certain states, where assets acquired during marriage are considered jointly owned by both spouses.

A type of co-ownership similar to joint tenancy but specifically applicable to married couples. It provides automatic rights of survivorship and protects assets from individual creditors.

Everything a person owns at the time of their death, excluding jointly held assets and those transferred before death. The heirs inherit the assets from the deceased's estate.

A legal structure where a trustee manages assets on behalf of beneficiaries, distributing assets according to a trust agreement.

Total earnings of an individual or business before taxes or other deductions.

Taxation's primary purpose is to generate revenue for the government, which is called its fiscal purpose. This revenue is collected from income and businesses to fund government operations and services.

This theory states that taxes are crucial for the government's survival and functions. Just like blood sustains a living organism, taxes provide the financial resources needed for the government to operate and offer essential services to its citizens.

This theory suggests that individuals should contribute taxes in proportion to the benefits they receive from government services. The more you benefit from government services, the more you should pay in taxes.

This theory emphasizes fairness in taxation, stating that individuals should contribute based on their financial capacity. Higher earners, with greater financial resources, pay a larger proportion of their income in taxes.

It's the government's authority to protect the general welfare of its citizens by implementing laws and regulations for public safety and health.

The police power regulates activities to protect public health and safety, while eminent domain allows the government to take private property for public use with just compensation.

Eminent Domain is superior to the Non-Impairment Clause, meaning the government can use eminent domain to take private property, even if it conflicts with a contract.