reasons for taxation economics

Tax Evasion: Tax evasion is the failure to declare taxable activity or income and this is a practice in the employment of the services such as consultancies, builders, plumbers and decorators. TAX DRIVE: This means raid carried out by tax officials aimed at collecting tax revenue due to government from tax payer. Advocates, such as Eric M. Engen, argue that greater freedom with respect to withdrawals from tax-favored savings accounts would encourage even people with modest incomes, who cannot risk “locking up” their limited funds until retirement, to save. These increased hours would translate into the equivalent of almost five million full-time jobs.

A tax whose amount is easily manipulated through decisions in the private marketplace (by investing in “tax shelters,” for example) can cause tremendous complexity for taxpayers, who attempt to reduce what they owe, and for revenue authorities, who attempt to maintain government receipts. If you need assistance with writing your essay, our professional essay writing service is here to help! The word equity centers on the fairness and justness of collecting taxes by government.

The population size of the research work is 120 which includes the senior official and some staff of inland revenue department of ministry of finance make up the sample frame. “Capital Gains.” In Henry Aaron and Joseph A. Pechman, eds., Poterba, James M., Steven F. Venti, and David A. The pretest set back of this research is the most of the interviewed official (Tax Officials).
High tax rates for upper-income households are inefficient but are judged by some to make the tax system fairer. Tax is an enforced fee that is charged on individuals and organizations by government or its agency on a product, income, or service. Taxes as such can be used as an effective tool to reduce the consumption of unwanted goods like alcohol. Other, more conservative economists advocate greater incentives for household saving, such as allowing withdrawals of nondeductible deposits into designated savings accounts to be tax free. TAX RELIEFS: These are allowance to a tax payer on his circumstance prevailing in the preceding year of assessment such as personal allowance, children allowance, relatives and dependent allowances etc.

We are here to answer your questions. The tax law should not induce a businessman to invest in real estate instead of research and development—or vice versa.

TAX AVOIDANCE: This is a situation by which a tax payer take advantage of the weakness or loopholes in the tax system in order to pay less tax than he ought to have paid. trade, business, profession or vocation.

Yet the federal government’s budget has gone from enormous deficit to large surplus, and back again, in just ten years. Indirect taxes are computed in the cost of goods or services an individual or organization purchases. Remarks at the National Bureau of Economic Research Tax Policy and the Economy Meeting. The scope of this study covered the cause and effects of Tax Evasion and Avoidance on the economy Tax Board of Internal Revenue in Abia State and is of the view that this will bear good result. National Press Club, November 4, 2003. How can tax evasion and tax avoidance by minimized and eliminate in Abia State?

6 of 1969, the Board of Internal Revenue was established as a statutory body to take charge of tax amended the edict. Economists specializing in public finance have long enumerated four objectives of tax policy: simplicity, efficiency, fairness, and revenue sufficiency. “The Illusory Effects of Saving Incentives on Saving.”. Tax scholars observed the experience of the 1980s closely to learn more about how taxes affect economic choices. Minarik, Joseph J. Equity in relation to taxation is another important element that needs to be clear understood as far as taxation is concerned. It was, however, radically different from the 1981 tax cuts in a more meaningful sense, in that all of the tax rate cuts were “paid for” by the elimination of tax incentives—including the remaining business investment inducements from 1981. TAX LIABILITY: This is the total amount of tax an individual or company is supposed to pay.
The relative contribution of excise taxes (primarily on alcohol, tobacco, gasoline, and telephone services) has declined significantly. Princeton’s David F. Bradford and Stanford’s Robert E. Hall have advocated slightly different forms of a flat-rate tax on labor income coupled with immediate deduction (“expensing”) of the cost of all investment for the corporate income tax.

INDIRECT TAX: This is the type of tax that is levied on goods and services. This is a principle that taxes should be fair and should be based on different people’s ability to pay, and is usually related to their income. Taxation in Abia State is not quite different from of Nigeria as a country but there are certain peculiar features in her profile so as to give detail understanding of the state in her Revenue generating effort that we have decided in the state. To investigate why people evade and avoid tax. Another source is self-employment income, which is any money that an individual makes outside a regular job from services rendered.

TAX COLLECTION: This is the process of receiving or gathering taxes from tax payer. In other words, a government can run its administrative set up only through public funding which is collected in the form of tax. •Final … Furthermore, taxes are enforced in a manner that facilitates voluntary compliance from individuals and organizations to the … It could even take the entire income of low-income people. As a source for additional understanding of the subject. First, the higher a family’s income, the higher the percentage of income that family pays in federal taxes. Another form of direct tax is tax based on wealth and this is based on the wealth of an individual at the date of death and is sometimes called Estate Duty. This law was to fill the gaps which the federal legislation could legislate on example assessment appears machinery, the machinery for collection and the rates of tax. The taxation principles emphasize that taxes collected should be just-enough to generate revenue required for provision of essential public services, and that taxes must be spread over as wide as possible section of the population, or sectors of economy.

Many economists judge the fairness of the tax system largely on how the tax burden is distributed among different income groups. For example, if an individual operates a home-based business, money from this endeavor would be counted as self-employment income. Further, the ultimate tax liability should be certain. Advocates of repeal, such as Council of Economic Advisers Chair N. Gregory Mankiw, argue that the estate tax, whose highest pre-2001 rate, at 55 percent, was significantly higher than the income tax, constituted double taxation and both discouraged effort and increased consumption on the part of older wealthy people. Registered Data Controller No: Z1821391.

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