Personal Income Tax Overview

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What type of tax is Personal Income Tax?

Direct (correct)
Excise
Progressive
Indirect

Which factor does Personal Income Tax consider when determining the tax amount for individuals?

Age
Height
Favorite color
Total income obtained (correct)

What does it mean when Personal Income Tax is described as progressive?

The tax rate increases more than proportionally with income (correct)
The tax rate remains constant regardless of income
The tax rate decreases with increasing income
The tax rate is fixed for all income levels

Why is Personal Income Tax considered personal?

It takes into account personal and family circumstances of individuals (B) Signup and view all the answers

What does 'irrespective of their origin' mean in relation to Personal Income Tax?

Tax is not influenced by where the income comes from (B) Signup and view all the answers

What does it mean for Personal Income Tax to be described as 'direct'?

It is levied on a direct manifestation of the ability to pay, such as rent (B) Signup and view all the answers

What is a key characteristic of Personal Income Tax according to Neumark?

Taxing total income without exemptions (C) Signup and view all the answers

Why does Personal Income Tax consider 'net income' according to tax principles?

To accurately determine the true income of the taxpayer (B) Signup and view all the answers

What aspect allows Personal Income Tax to be considered a 'progressive' tax?

It assumes that an individual's ability to pay increases more than proportionally with income (B) Signup and view all the answers

Which characteristic allows Personal Income Tax to adapt to the economic capacity of each taxpayer?

Taking into account personal and family circumstances (A) Signup and view all the answers

'Identity of object and taxable base' is a characteristic of Personal Income Tax that emphasizes what concept?

Matching tax base with the source of income (B) Signup and view all the answers

Which of the following is NOT taxed as income tax based on the text?

Corporate income (C) Signup and view all the answers

How are inter-jurisdictional problems related to taxation typically solved within the same country?

Harmonisation criteria established by a rule from the higher government (A) Signup and view all the answers

What do 'Double Taxation Agreements' aim to address?

Inter-jurisdictional taxation conflicts between different countries (A) Signup and view all the answers

Which organization developed a model of tax treaty?

OECD (A) Signup and view all the answers

What distinguishes income accruing to natural persons from income accruing to legal persons according to the text?

Treatment under corporate tax (C) Signup and view all the answers

What is considered as part of consumption in the extensive approach to income?

Remuneration in kind (C) Signup and view all the answers

In the economic sense according to Simons, how is an individual's income calculated?

As the sum of consumption and wealth variation (C) Signup and view all the answers

What concept related to income did the Carter Report suggest adding donations to?

Extensive income considered Taxable income in the personal income tax (A) Signup and view all the answers

Which aspect does Haig's definition of income focus on according to the text?

Net increase in individual's consumption capacity (C) Signup and view all the answers

What does "change in wealth" under the extensive approach to income calculation involve?

Savings and capital gains (B) Signup and view all the answers

Why did Rosen argue for using the concept of extensive income?

To add the contributions of various scholars to the concept of income (D) Signup and view all the answers

Why is it suggested to treat all types of income equally for tax purposes?

To improve the neutrality of the tax system. (D) Signup and view all the answers

Which principle from Haig, Simons, and Carter contributes to the concept of extensive income according to the text?

Horizontal equity principle (B) Signup and view all the answers

Why is self-consumption included in the economic concept of income according to the text?

To tax the utility obtained in the form of self-consumption instead of money and accomplish horizontal equity (A) Signup and view all the answers

What types of expenses are deducted from gross income to obtain net income according to the text?

Operating expenses and personal expenses (A) Signup and view all the answers

Why are unrealised capital gains typically not taxed in any tax system according to the text?

Due to problems on liquidity of tax payers to afford the burden of the tax and due to problems in certainty in order to determine the capital gain (B) Signup and view all the answers