Taxes and Taxation
posted in Uncategorized |The right to impose taxes is not only the right to destroy but also the right to build up.
“You can be sure in nothing but in death and taxes” – said a great politician once.
What do taxes serve for? What functions do they accomplish?
The slight reverse into the history of taxation system would help to orientate in the current complex tax relations. The history is necessary to analyze the prospects of taxation system development and to understand its state.
New kinds of taxation appeared with the economic relations development. Cites grew, tax system enriched itself with the growth of manufacture and the population increased, the number of taxes was becoming larger.
Government was always in need of a tax system which makes considerable revenue to the budget.
Types of Taxes and Taxation Systems
There are two major types – taxes on income and taxes on property: income tax and the tax on enterprise (firm) profit, on social insurance and the wages fund, property taxes including land and other real estate, tax on transference of profit abroad. These are collected from a physical and juridical person and are called direct taxes. Another one is – taxes on goods and services; tax on turnover – in the majority of developed countries it’s replaced by value added tax -, excises (taxes directly included in prices of goods and services); on inheritance; on deals with real estate and value papers and others. These are indirect taxes. They are partially or completely carried on the prices of goods and services.
There are also stable, proportionate, progressive and regressive tax rates. Stable rates are defined according to the complete sum for the taxation unite, independently of income measure. Proportional – apply with the same percentage to the taxation object without differentiation calculation of its measure. Progressive rates mean the increase of rates size as the profit rises. Progressive taxes mostly oppress those with the high income. Regressive rates mean the decrease of rates size as the profit rises. Regressive tax may not increase the total size of the budget revenues with the growth tax payers’ income.
Nowadays we observe two types of taxation systems:
– schedular
– global.
In the scheduler tax payer’s total income is divided into shares – schedules – each of which is imposed by special tax. For different schedules various rates, tax rebates and other tax elements may be set. In global taxation system the same taxes are imposed upon all the incomes of either physical or juridical persons. Such a system makes it easier for businessmen to calculate taxes and to plan financial results.
