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Questions and Answers
According to the theory of taxation, what is the basis for people paying taxes?
According to the theory of taxation, what is the basis for people paying taxes?
- Inherent power of the state
- Mutuality of support between people and government (correct)
- Ability to pay
- Receipts of benefits
According to the benefit-received theory, how are taxes determined?
According to the benefit-received theory, how are taxes determined?
- Taxes are determined based on the inherent power of the state
- Taxes are determined based on the taxpayer's circumstances
- Taxes are determined based on the taxpayer's ability to pay
- Taxes are determined based on the amount of benefit received (correct)
Which concept of equity in taxation considers the taxpayer's circumstances?
Which concept of equity in taxation considers the taxpayer's circumstances?
- Horizontal equity (correct)
- Vertical equity
- Inherent power of the state
- Ability to pay theory
What does the lifeblood doctrine state about taxes?
What does the lifeblood doctrine state about taxes?
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What is the power of taxation?
What is the power of taxation?
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Study Notes
Taxation Theories and Concepts
- The basis for people paying taxes is the ability-to-pay principle, which states that individuals should pay taxes based on their financial ability to do so.
Benefit-Received Theory
- The benefit-received theory determines taxes by considering the benefits individuals receive from public expenditures, such as infrastructure, education, and healthcare.
Equity in Taxation
- The horizontal equity concept considers taxpayers' circumstances, ensuring that individuals with similar economic circumstances are treated equally and pay similar amounts of tax.
Lifeblood Doctrine
- The lifeblood doctrine states that taxes are the lifeblood of the government, implying that taxation is essential for the government's survival and operation.
Power of Taxation
- The power of taxation refers to the government's authority to impose taxes, enabling it to generate revenue and fulfill its obligations to citizens.
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