Topics: Tax, Taxation in the United States, Property Pages: 5 (1696 words) Published: March 8, 2015

Taxation- process or means by which the sovereign, through its lawmaking body, raises income to defray necessary expenses of the government; power of the State, inherent in sovereignty -indispensable and inevitable price for civilized society, without taxes, government would be paralyzed. Taxes- lifeblood of the government and their prompt and certain availability are an imperious need. Objectives of Taxation:

Shifting wealth from the rich to the poor
Maintaining price stability
Stimulating economic growth
Encouraging full employment
State Powers:
Taxation- power of the state by which the sovereign raises revenue to defray the necessary expenses of the government. Eminent Domain- the power of the State to take private property for public use upon payment of just compensation. Police power- the power of the State to enact laws to promote public health, public morals, public safety and the general welfare of the people. Aspects of Taxation:

Levying of the tax- requires legislative function
Collection of the tax levied- administrative function
Basic Principles of a Sound Tax System
a. Fiscal adequacy- sources of revenue are sufficient to meet government expenditures. b. Equality or theoretic justice- tax imposed must be proportionate to taxpayer’s ability to pay. c. Administrative feasibility- the law must be capable of convenient, just and effective administration. Limitations on the power of Taxation:

Constitutional limitations- provided for in the Constitution or implied from its provision. Inherent limitations- are restrictions to the power to tax attached to its nature.

Purpose- taxes may be levied only for public purpose
Territoriality- the State may tax persons and properties under its jurisdiction. International comity- the property of a foreign State may not be taxed by another. Exemption- governmental agencies performing governmental functions are exempt from taxation. Non-delegation- the power to tax being legislative in nature may not be delegated. DOUBLE TAXATION

Direct duplicate taxation- taxed twice when it should be taxed but once, in a fashion that both taxes are imposed for the same purpose by same taxing authority. Indirect double taxation- may not be prove unconstitutional, it is being avoided so as not to bring injustice to the taxpayer. TAXES are not subject to set-off or legal compensation under Article 1279 of the Civil Code.

Escape from Taxation:
a. Tax avoidance (Tax minimization)- when the taxpayer minimizes his tax liability by taking advantage of legally available tax planning opportunities. b. Tax evasion (Tax dodging)- when the taxpayer resorts to unlawful means to lessen or to get away with his tax liability. Situs of Taxation- place of taxation; The State may rightfully levy and collect the tax where the subject being taxed has a situs under its jurisdiction. Number of Factors:

a. Subject matter- what is being taxed maybe a person, property, an act of activity. b. Nature of tax- which tax to impose; maybe an income tax, import duty or real property tax. c. Citizenship of the taxpayer

d. Residence of the taxpayer
Situs of Taxation apply:
Persons- residence of the taxpayer
Real property or tangible personal property- location of the property Intangible personal property- situs is the domicile of the owner unless he has acquired a situs elsewhere. Income- taxpayer’s residence or citizenship, or place where the income was earned. Business, occupation and transaction- place where business is being operated, occupation being practiced and transaction completed. Gratuitous transfer of property- taxpayer’s residence or citizenship, or location of the property. Characteristics of Tax:

An enforced contribution
Levied by the lawmaking body
Proportionate in character
Generally payable in money
Imposed for the purpose of raising revenues
Be used for public purpose
As to subject matter or...
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