Introduction to Taxation [1/2]

Hi! It's my first actual post, so please bear with me. 

Introduction to Taxation

Taxation - process by which the sovereign, through it's lawmaking body, raises income for payment of the government's necessary expenses.

       - an inherent power of the state to demand enforced contribution for public purposes.

Purpose of Taxation

• to raise revenue for the government's needs
• to shift the wealth from rich to the poor [D:]
• to maintain the price stability of goods
• to stimulate growth
• to encourage full employment

Inherent powers of the state

• Taxation -  power to demand enforced contributions for payment of the government's expenses.
• Eminent Domain - power of the state to take provate property for public use upon payment of just compensation
• Police Power - power of the state to enact laws to promote general welfare of the people

Basic Principles of a Sound Tax System

• Fiscal adequacy - sources of revenue are sufficient to meet government expenditures
• Theoretical justice - the tax imposed is proportionate to taxpayer's ability to pay
• Administrative feasibility - the law must be capable of convenient, just and effective administration

Limitations on the Power of Taxation

Constitutional Limitations - expressly found or implied in the constitution's provisions

• Observance of due process of law
• Equal protection of the law
• Rule of uniformity and equity in taxation
• No imprisonment for nonpayment of a poll tax
• Non-impairment of the obligations of contracts
• No appropriation for religious purposes
• Excemption of religious, charitable, and educational entities, non-profit cemeteries and churches
• Exemption of non-stock, non-profit educational institutions from taxation
• Concurrence by the majority of all the members of congress for the passage of a law granting tax exemption
• Power of the President to veto any particular items in a revenue or tariff bill
• Non-impairment of the jurisdiction of the court in tax cases

Inherent Limitations - those which restrict the power although they are not embodied in the constitution

• Taxes may be levied only for public purpose
• Nondelegation of the legislative power to tax
• Exemption from taxation of government entities
• International Comity
• Power to tax is limited to territorial jurisdiction of the state