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Questions and Answers
Which power of the state is described as having a plenary, comprehensive, and supreme nature?
Which power of the state is described as having a plenary, comprehensive, and supreme nature?
- Police Power
- Public Utility Regulation
- Taxation (correct)
- Eminent Domain
What distinguishes Police Power from Taxation in terms of its application?
What distinguishes Police Power from Taxation in terms of its application?
- It is narrower in scope
- It transfers ownership of property
- It only affects private property
- It applies to broader community interests (correct)
In which situation is there a transfer of property ownership?
In which situation is there a transfer of property ownership?
- Eminent Domain (correct)
- Police Power
- Taxation
- Public Utility Regulation
What is a primary benefit associated with Taxation?
What is a primary benefit associated with Taxation?
Which inherent power is primarily concerned with regulating public welfare without transferring property ownership?
Which inherent power is primarily concerned with regulating public welfare without transferring property ownership?
How does the scope of Eminent Domain compare to the other powers of the state?
How does the scope of Eminent Domain compare to the other powers of the state?
Which of the following best describes the effect of Taxation on individuals?
Which of the following best describes the effect of Taxation on individuals?
What type of power involves the potential for just a restraint of property use, rather than its outright confiscation?
What type of power involves the potential for just a restraint of property use, rather than its outright confiscation?
What type of tax is characterized by a fixed percentage applied to the amount of income or property?
What type of tax is characterized by a fixed percentage applied to the amount of income or property?
Which tax rate increases as the tax base increases?
Which tax rate increases as the tax base increases?
What type of tax decreases as the tax base increases?
What type of tax decreases as the tax base increases?
Which of the following is a tax imposed by local municipal governments?
Which of the following is a tax imposed by local municipal governments?
What is defined as a fine imposed as a punishment for law violations?
What is defined as a fine imposed as a punishment for law violations?
What is a toll primarily associated with?
What is a toll primarily associated with?
Tax avoidance refers to which of the following?
Tax avoidance refers to which of the following?
What is the primary classification of a tax that is imposed on an individual as a fixed amount?
What is the primary classification of a tax that is imposed on an individual as a fixed amount?
What is a subsidy?
What is a subsidy?
Which of the following represents a tax that can be shifted to another party?
Which of the following represents a tax that can be shifted to another party?
What is the primary principle that limits a country's taxing power to persons and property?
What is the primary principle that limits a country's taxing power to persons and property?
Which of the following is NOT a factor to consider in determining the situs of taxation?
Which of the following is NOT a factor to consider in determining the situs of taxation?
What is the Lifeblood Doctrine in relation to taxation?
What is the Lifeblood Doctrine in relation to taxation?
Which type of tax is determined based on the value of the property through an independent appraisal?
Which type of tax is determined based on the value of the property through an independent appraisal?
What is the situs for taxing real property?
What is the situs for taxing real property?
What does the Necessity Theory suggest about taxation?
What does the Necessity Theory suggest about taxation?
Which of the following taxes is considered a fiscal tax with no designated purpose?
Which of the following taxes is considered a fiscal tax with no designated purpose?
What classification does a tax, such as a Real Estate Tax, fall under based on its subject matter?
What classification does a tax, such as a Real Estate Tax, fall under based on its subject matter?
Which element ensures a tax system meets government expenditures?
Which element ensures a tax system meets government expenditures?
In terms of taxation, what does the term 'non-delegability' refer to?
In terms of taxation, what does the term 'non-delegability' refer to?
What does the concept of Theoretical Justice in taxation refer to?
What does the concept of Theoretical Justice in taxation refer to?
Which type of tax is imposed on the performance of a specific act or privilege?
Which type of tax is imposed on the performance of a specific act or privilege?
Which of the following types of duplicate taxation is typically considered objectionable?
Which of the following types of duplicate taxation is typically considered objectionable?
Which organization is NOT granted tax exemptions despite performing proprietary functions?
Which organization is NOT granted tax exemptions despite performing proprietary functions?
Which theory supports the idea of reciprocal duties between the State and its inhabitants?
Which theory supports the idea of reciprocal duties between the State and its inhabitants?
What kind of tax is raised by the national government?
What kind of tax is raised by the national government?
What is a key characteristic of a sound tax system according to the provided information?
What is a key characteristic of a sound tax system according to the provided information?
Which classification of tax is intended to achieve a social or economic goal?
Which classification of tax is intended to achieve a social or economic goal?
According to the principles of international comity, which situation is valid regarding taxation?
According to the principles of international comity, which situation is valid regarding taxation?
What is the situs for taxing income?
What is the situs for taxing income?
In which way should taxation reflect the citizens' status in society?
In which way should taxation reflect the citizens' status in society?
What is the ultimate purpose of the tax system as described?
What is the ultimate purpose of the tax system as described?
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Study Notes
Government Authority
- Government authority may be granted to public service or utility companies for specific regulations.
- The purpose of this authority is to support the general welfare of the community.
Inherent Powers of the State
- Taxation: Affects community or classes of individuals; comprehensive and supreme power that contributes to public funds.
- Police Power: Broader in application; allows for restraint on property use to promote public welfare without direct benefit.
- Eminent Domain: Affects individuals as property owners; enables government to take private property for public use, resulting in transfer of title.
Tax Theory
- Lifeblood Doctrine: Taxes are essential for government existence and function.
- Necessity Theory: Taxation is necessary for the government's survival and ability to serve its citizens.
- Benefits-Protection Theory: Taxation is based on mutual responsibility for protection and support between the state and its citizens.
Elements of a Sound Tax System
- Fiscal Adequacy: Revenue sources must meet government expenditures.
- Theoretical Justice: Tax system should be progressive, based on ability to pay.
- Administrative Feasibility: Tax laws must be simple, flexible, and effective for easy administration.
Situs of Taxation
- The state's taxing power is limited to persons and property within its jurisdiction.
- Taxing authority is based on the location or domicile of the subject matter (e.g., real property location, taxpayer residence).
International Comity and Taxing Power
- A state cannot tax another state to uphold sovereign equality.
- Taxing power is a legislative function and cannot be delegated to executive or judicial branches.
Tax Exemptions
- Government agencies performing governmental functions are generally tax-exempt unless expressly taxed.
- Government-owned and controlled corporations (GOCCs) performing proprietary functions are taxed but certain entities may have exemptions (e.g., GSIS, SSS, PHIC).
Double Taxation
- Direct Duplicate Taxation: Objectionable and violates uniformity; same taxpayer taxed again.
- Indirect Duplicate Taxation: Not legally objectionable, can occur from different authorities.
Tax Classification
-
According to Subject Matter:
- Personal Tax: Fixed amount, e.g., Community Tax.
- Property Tax: Imposed on property, e.g., Real Estate Tax.
- Excise Tax: Imposed on actions or privileges, e.g., estate, income, and value-added taxes.
-
According to Burden:
- Direct Tax: Paid by those bound by law, e.g., Income Tax.
- Indirect Tax: Shifted to others, e.g., Customs Duties.
-
According to Amount:
- Specific Tax: Based on a physical unit, e.g., tax on liquor.
- Ad Valorem Tax: Based on property value, needing appraisal, e.g., Real Estate Tax.
-
According to Purpose:
- Fiscal/General/Revenue Tax: No specific purpose, e.g., Income Tax.
- Regulatory Tax: For special purposes, e.g., protective tariffs.
-
According to Jurisdiction:
- National Tax: By the national government, e.g., Internal Revenue Tax.
- Local Tax: By municipal governments, e.g., Real Estate Taxes.
-
According to Rate:
- Proportional Tax: Fixed percentage, e.g., Percentage Taxes.
- Progressive Tax: Rate increases with tax base, e.g., Income Tax.
- Regressive Tax: Rate decreases with increased tax base, e.g., Value-Added Tax.
Additional Terms
- Toll: Payment for use of public infrastructure.
- Penalty: Sanction for law violations.
- Special Assessment: Contribution from property owners for public improvements.
- Permit or License Fee: Charge for regulatory purposes under police power.
- Customs Duties: Taxes on imported/exported goods.
- Revenue: All government funds derived from various sources.
Escape from Taxation
- Evasion: Unlawfully reducing tax liability.
- Avoidance: Legal minimization of tax liabilities through planning opportunities.
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