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Principles and Methods of Taxation
Abstract
Purpose The purpose of the paper is to study available methods and principles of taxation and substantiate a necessary introduction of technical innovation principle. Methodology The methodology background is systematization and classification methods. Also, we applied ones of regression and correlation analysis. Results We revealed available methods of taxation and presented that the selection should be based on the tax principles. These principles should be proceeded from the peculiarities and priorities of social and economic system development and be divided into three categories: the constitutional principles of taxation, the principles of tax process management and the principles of resolving tax disputes. We managed to illustrate it owing to proprietary structural and logical scheme of principles and methods of taxation in the tax system. Collectively, they are aimed at the tax system improvement. Therewith, application of technical innovation plays an important role. Recommendations On the base of revealed close and direct dependence of the tax system competitiveness on the extent of E-services integration in the tax practice through the countries worldwide in 2018, it is advised to add the technical innovation principle to the principles of the tax process management.
... The literature talks about two types of equity, namely: -horizontal equity, in which persons with the same characteristics have a similar tax treatment (fixed taxation method, in which the amount of tax is fixed, regardless of the value of the tax base); -vertical equity, which involves the application of taxation directly proportional to income or wealth, respectively, the higher the income, the higher the taxes. Gashenko et al (2019) consider that vertical equity brings new features to the taxation process, by classifying taxation methods into: a. Regressive taxation, which involves a decrease in the tax rate with the increase of the tax base, so that those with low incomes pay a higher share of tax revenues than those with higher incomes. Almost any tax on necessities is regressive, because people with lower incomes end up consuming a larger share of their income. ...
This research does not aim to achieve the optimal taxation, because this is theoretically plausible, but in practice, is an amalgam of principles, roles and objectives, which could not be achieved at the same time, so that the taxation process works in-an ideal way, without negative effects on the economic and social life of societies. Thus, the main purpose of this study is to study the characteristics that give taxation optimal elements, so that the fulfillment of as many of them can lead to a good tax system, in any economy, whether it is a developed or a developing economy. To achieve this goal, the research methodology is based on theoretical research of the opinions and visions held by theorists in the economic world. The research results are based on the fact that, although the principles and roles of taxation are interpreted differently over time, their essence is the same, and the development of a tax culture is a novelty, addressed in the literature in recent years.
It has been shown that, in the two-sector Benhabib–Farmer–Guo model with technologies of social increasing returns that exhibits indeterminacy, progressive income taxes de-stabilize the economy. This paper revisits the robustness of the tax implication in the two-sector Benhabib–Nishimura model with technologies of social constant returns that exhibits indeterminacy. We show that a progressive income tax stabilizes the economy against sunspot fluctuations, and thus the tax implication based on the two-sector Benhabib–Farmer–Guo model is not robust.
Income inequality has become one of the more widely debated social issues today. The current article explores the role of progressive taxation in income inequality and happiness. Using historical data in the United States from 1962 to 2014, we found that income inequality was substantially smaller in years when the income tax was more progressive (i.e., a higher tax rate for higher income brackets), even when controlling for variables like stock market performance and unemployment rate. Time lag analyses further showed that higher progressive taxation predicted increasingly lower income inequality up to 5 years later. Data from the General Social Survey (1972–2014; N = 59,599) with U.S. residents (hereafter referred to as “Americans”) showed that during years with higher progressive taxation rates, less wealthy Americans—those in the lowest 40% of the income distribution—tended to be happier, whereas the richest 20% were not significantly less happy. Mediational analyses confirmed that the association of progressive taxation with the happiness of less wealthy Americans can be explained by lower income inequality in years with higher progressive taxation. A separate sample of Americans polled online (N = 373) correctly predicted the positive association between progressive taxation and the happiness of poorer Americans but incorrectly expected a strong negative association between progressive taxation and the happiness of richer Americans.
Commercial banks, due to their position in the financial system, are a necessary part in ensuring the correct and timely tax payments to the state budget, which certainly affects the economy as a whole. Despite of the periodical changes in legal bank taxation, in regulation and in reforming, the banks are not still the “locomotive” of the economy. Therefore, the study of foreign practice of taxation and its analysis will allow us not to repeat the mistakes and to use the experience to expedite the process of civilized market reforms in Russia. The article deals with the taxation of profits of commercial Banks in Russia and in developed countries of the world. The comparative analysis of profit taxation practice in Russia, USA, UK, Germany and France is made. The characteristic, applied to financial and credit institutions types of taxes and tax rates, is done. Tax incentives and suggested ways of improvement of taxation in commercial Banks in the Russian Federation and foreign countries are analyzed. The most effective ways of tax impact of the state on banking activities are considered, their detailed characteristics is given. On the basis of the conducted research, the conclusions about the relatively low tax load of banks in the Russian Federation and the high differentiation of tax rates in the United States were made. However, the main ways of tax policy improvement in the banking sector are related to the efficiency of interaction between government and financial-credit organizations. © 2016, International Journal of Economics and Financial Issues. All rights reserved.
This Article considers the distributional consequences of the Supreme Court’s federalism jurisprudence over the past quarter century, focusing specifically on the anti-commandeering, anti-coercion, and state sovereign immunity doctrines. The first of these doctrines prevents Congress from compelling the states to administer federal programs; the second prevents Congress from achieving the same result through offers that for practical purposes the states cannot refuse; the third prohibits Congress from abrogating state sovereign immunity outside a limited class of cases. These doctrines vest the states with valuable entitlements and allow the states to sell those entitlements back to Congress for a price. In this respect, the doctrines have an intergovernmental distributional effect, shifting wealth from the federal government to the states. The distributional consequences of the anti-commandeering, anti-coercion, and state sovereign immunity doctrines are not purely intergovernmental, however. The doctrines also have potential implications for the distribution of wealth across individuals and households. By forcing Congress to bear a larger share of the costs of federal programs, and by shifting some of the costs of liability-imposing statutes from the states to Congress, these doctrines allow the states to raise less revenue and compel Congress to raise more. For a number of historical as well as structural reasons, the federal tax system is dramatically more progressive than even the most progressive state tax systems, and so the reallocation of fiscal responsibility resulting from these federalism doctrines causes more revenue raising to occur via the more progressive system. The likely net effect is a shift in wealth from higher-income households (who bear a larger share of the federal tax burden) to lower-and middle-income households (who would have borne a larger share of the burden of state taxes). This conclusion comes with a number of caveats. The distributional consequences of the Supreme Court’s federalism doctrines may be moderated—or magnified—by differences in federal and state spending priorities. Moreover, the doctrines may affect the size of government as well as the allocation of fiscal responsibility across levels of government (though the net effect on government size is ambiguous). And the doctrines may have distributional consequences that are not only interpersonal, but also intergenerational. What seems clear from the analysis in this Article is that federalism doctrines affect the distribution of income and wealth in subtle and sometimes unexpected ways, and that a comprehensive understanding of wealth inequality in the United States requires careful attention to key features of our fiscal constitution.
The purpose of the article is to develop the mechanism of optimization of the system of tax administration with the help of new information and communication technologies by the examples of modern Russia. For studying the connection between the system of tax administration and usage of new information and communication technologies, the authors use the method of correlation analysis. The authors calculate the correlation coefficients for time spent for tax accounting according to PricewaterhouseCoopers and the values of the E-government index according to the United Nations. For the sake of presentability of the data, the objects of the research are countries from various geographical regions of the world and with different values of studied indicators – Russia, the USA, China, the Maldives, the UAE, Ireland, and Singapore. The timeframe of the research is 2005–2016. With the help of this method, the authors also calculate the correlation coefficients for the values of the E-government index and the share of shadow economy according to the Association of Chartered Certified Accountants, as well as the share of tax revenues of state budgets of the countries according to the World Bank in 2016. The authors show that an important step on the path of overcoming the consequences of the global economic crisis is optimization of the tax administration system, which allows reducing the scale of shadow economy and ensuring more revenues for state budgets. A perspective tool for achieving this goal is implementing the new information and communication technologies into the process of tax administration. The authors analyze the problems that countries of the world face in the process of optimization of the system of tax administration with the help of new information and communication technologies by the example of modern Russia.
Economic growth is one of the basic parts of the modern economic theory, as it reflects the targeted direction and dynamics of economic systems’ development.
Specifics of functioning of the socio-economic system of modern Russia, caused by its transitional period and combination of the features of various categories of countries in the global economy, determines unique and unprecedented conditions for managing the process of economic growth and development of this system. The consequences of uniqueness of the modern Russian economy are contradictory.
This chapter argues that the reform options that are currently on the table in the OECD BEPS process, in particular digital presence and virtual PE, would, in essence, create a separate tax regime for the digital economy, despite reported intentions to the contrary. This would not only contradict the OECD’s own technology neutrality principle in taxation, it would also contradict the free movement of services in the EU’s single market. Moreover, requiring online services to always establish a local presence would imply reneging on commitments made in multi- and bilateral free trade agreements on cross-border services trade. Furthermore, given the impact of ICT on productivity, international trade and, ultimately, economic growth, the cure could end up being worse than the disease.
We reconsider Casajus' (forthcoming) characterization of uniformly proportional taxation by three properties of redistribution: efficiency, symmetry, and monotonicity. When restricted to non-negative income, these properties imply proportional taxation in a weaker sense-the tax rate may vary with total income but only in an economically reasonable way.
This paper provides a quantitative evaluation of the welfare effect of the introduction of proportional taxation in Bulgaria in 2008, an effect that operates through the grey economy channel. Using a general-equilibrium model, augmented with informal sector, a computational experiment is performed to evaluate the welfare gain from the adoption of proportional taxation. The lower effective tax burden in the new tax regime produces a relocation of people into the official sector, stimulates investment, and increases output and consumption. Finally, under the flat tax regime, the size of the informal sector is smaller, and quantitatively consistent with OECD (Is informal normal? Towards more and better jobs in developing countries. OECD, Paris, 2009) and European Commission (Tax reforms in EU member states, Official Publications of the European Communities, Luxembourg, p 2012, 2012) figures.
International corporate taxation and the extractive industries: Principles, practice, problems
- M Keen
- P Mullins
International e-Government Rankings-2017
- Iac Waseda
Fundamental principles of environmental taxation
- I Da Silva Santos Filho
- P R A Ferreira