Podcast
Questions and Answers
Which of the following best describes the inherent nature of taxation?
Which of the following best describes the inherent nature of taxation?
- Taxation is the state's power to raise revenue through its law-making body to cover necessary government expenses. (correct)
- Taxation is dependent on the consent of the individuals being taxed.
- Taxation is limited to direct taxes on income and property.
- Taxation is a tool used to redistribute wealth irrespective of government expenses.
In what manner are taxes characterized, concerning an individual's obligation?
In what manner are taxes characterized, concerning an individual's obligation?
- Optional donations.
- Enforced contributions. (correct)
- Negotiated payments.
- Voluntary contributions.
What foundational element determines the burden taxes will place on an individual?
What foundational element determines the burden taxes will place on an individual?
- The government's preference.
- The size of the individual’s family.
- The individual's ability to pay. (correct)
- The individual's political affiliation.
What principle dictates that taxes must stem from legal authority?
What principle dictates that taxes must stem from legal authority?
What describes the recipient of tax proceeds?
What describes the recipient of tax proceeds?
Which entities are subject to state-imposed taxes?
Which entities are subject to state-imposed taxes?
Why doesn't taxation require a constitutional grant?
Why doesn't taxation require a constitutional grant?
Where does the character lies for taxation?
Where does the character lies for taxation?
Which body does the Constitution vest the power to tax?
Which body does the Constitution vest the power to tax?
Which description aligns best with the primary function of taxation?
Which description aligns best with the primary function of taxation?
What is the description of 'sin taxes'?
What is the description of 'sin taxes'?
Which initiative is focused on taxation to decrease the divide?
Which initiative is focused on taxation to decrease the divide?
Which option aligns with the promotion of general welfare?
Which option aligns with the promotion of general welfare?
What is being protected when taxation is applied to foreign goods?
What is being protected when taxation is applied to foreign goods?
What is the purpose of tax incentives for investors?
What is the purpose of tax incentives for investors?
Lifeblood Theory indicates that what should be continuous?
Lifeblood Theory indicates that what should be continuous?
In the Necessity Theory, what is paramount to every society?
In the Necessity Theory, what is paramount to every society?
What is described as a symbolic relationship in Benefits-Protection Theory?
What is described as a symbolic relationship in Benefits-Protection Theory?
What should be sufficient to meet the demands of public expenditures?
What should be sufficient to meet the demands of public expenditures?
What must be proportionate to the taxpayer's ability to pay?
What must be proportionate to the taxpayer's ability to pay?
Flashcards
Taxation
Taxation
The inherent power of the state to raise revenue through its law-making body to cover government expenses.
Enforced Contributions
Enforced Contributions
Taxes are mandatory contributions, not optional or voluntary.
Proportional Taxation
Proportional Taxation
Taxes are based on one's ability to pay; higher income, more taxes.
Authority of Law
Authority of Law
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Support of Government
Support of Government
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Jurisdictional Imposition
Jurisdictional Imposition
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Inherent in Sovereignty
Inherent in Sovereignty
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Legislative Character
Legislative Character
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Lifeblood Theory
Lifeblood Theory
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Necessity Theory
Necessity Theory
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Benefits-Protection Theory
Benefits-Protection Theory
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Fiscal Adequacy
Fiscal Adequacy
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Equality/Theoretical Justice
Equality/Theoretical Justice
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Administrative Feasibility
Administrative Feasibility
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Police Power
Police Power
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Power of Eminent Domain
Power of Eminent Domain
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Primary Purpose of Taxation
Primary Purpose of Taxation
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Regulatory Purpose of Taxation
Regulatory Purpose of Taxation
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Reduce Social Inequality
Reduce Social Inequality
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Study Notes
General Principles of Taxation
- Taxation is the inherent power of the State to raise revenue through its law-making body to cover necessary government expenses.
- Taxes are enforced contributions and not dependent on the will of the person taxed.
- Taxes are proportional in character, based on one’s ability to pay.
- Taxes are levied by authority of law.
- Taxes support the government and all its public needs.
- Taxes are imposed by the State on persons, property, or services within its jurisdiction.
- The power to tax is vested in Congress according to the Philippine Constitution, Article VI.
- Congress can create laws necessary for executing the power to tax.
- The power to tax is essential for a nation's existence and prosperity, serving to both sustain and protect.
Two-Fold Nature of Taxation
- Inherent in sovereignty - No constitutional grant is needed.
- Legislative in character - Exercised by the legislature of the State.
Purposes and Objectives of Taxation
- Primary purpose is to raise revenue to support the government.
- Secondary purposes include regulatory measures, such as sin taxes.
- Taxes help reduce social inequality through progressive systems.
- They promote general welfare, for instance with senior citizen discounts.
- Taxes support protectionism, especially for local businesses versus foreign ones.
- They are meant to encourage economic growth through tax incentives for investors.
Theories and Bases of Taxation
- Lifeblood Theory states that taxes are essential for the government's continued existence, without taxes, the government would be paralyzed.
- Necessity Theory asserts that government is necessary for any society, requiring means to sustain itself, thus, it can compel contributions from citizens and property within its jurisdiction.
- Benefits-Protection Theory posits taxation as a symbolic relationship: citizens pay taxes in exchange for government-provided benefits and protection.
Basic Principles of a Sound Tax System
- Fiscal Adequacy: Revenue sources should be sufficient to meet public expenditure demands.
- Equality or Theoretical Justice: Taxes should be proportionate to the taxpayer's ability to pay, with progressive rates increasing as the tax base increases.
- Administrative Feasibility: Tax laws should be capable of convenient, fair, and effective administration.
Three Inherent Powers of the State
- Taxation
- Police Power
- Power of Eminent Domain
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