Module 1 discussion

Friday, September 10, 2021 6:17 PM

Taxation is the process of raising revenue for public purposes

- Done by congress

Purpose - defray the expenses of the government

- For public purpose only, NEVER for private purpose
- Non revenue - in regulation
○ Eg. Duties on imported articles
protects the local industry

Tax - is the enforced contribution

Characteristics of a tax

- Imposed, required
- In the form of money
- Proportionate
- Levied for public purpose

Subject matter:
- Person
- Rights/privelages (excise tax)
- Property

Theory and basis of taxation

Lifeblood theory
Necessity theory

The power to tax is the power to destroy

- Confiscate property
- Penal sanctions

Justice holmes: "the power to tax is not the power to destroy while this court sits"
Because: once congress enacts abusive tax laws, we have the courts for our defense

Subject to constitutional limitations

Principles of a sound tax system

Fiscal adequacy
- Meets public expenditure

Theoretical justice
- Based on taxpayers ability to pay

Administrative feasibility

Types of tax
As to subject matter
- Property

Taxation Page 1
 - Property
- Person
- Rights/privelages

As to who bears the burden

- Direct tax - cannot shift the burden to another taxpayer
○ Eg. Income tax, estate tax,
- Indirect tax - "in the hope that he be reimbursed"
○ Eg. Value added tax (in the POV of the businessman)

As to the determination of amount

Specific and ad valorem
- Specific - based on a physical unit of measurement
○ Eg. Tax based on weight, by liter
- Ad valorem - based on value/selling price

As to purpose
- General - revenue
- Special - non revenue

As to the taxing authority (page 136 dimaampao)

- National government
- Local government
○ Real property tax, business tax, etc.
- (differs as to remedies and venue, prescriptive period)

Progressive and regressive

- Progressive - tax increases as base amount increases
- Regressive, baliktad

Taxation Page 2