Taxation:

Income and Wealth

Under the Classification of

Taxes on Income and Wealth
fall the following impositions:
1. The personal and corporate income taxes
2. The transfer taxes namely, the estate and inheritance
taxes, and the donor’s and donee’s taxes
3. The real property tax on realty used for personal, i.e.,
non-business, purposes.
4. The individual residence tax, both basic and additional

5. The tax on motor vehicles used for personal purposes

6. The immigration tax

7. Firearms license fee

8. Hunting permit

9. Social security contributions, both of private and public

employees
 Arguments for taxes on income
and wealth

Taxation is a fiscal tool of government for the

achievement of economic, sometime non-
economic, goals. In a representative democracy,
taxes are imposed by the will of the majority of
the representatives of the people in order to
achieve the objectives of society.
According to Professor John F. Due, the
consensus in present-day society is considered
to regard four goals as of paramount of choice,
consistent with the welfare of the others:

1. Maximum freedom of choice, consistent with welfare of others

2. Optimum standards of living, in terms of available

resources and techniques, and in the light of consumer and
factor owner preferences.

3. An optimum rate of economic growth

4. A distribution of income in conformity with the standards

of equity currently accepted by the society.
In terms of this goals, three desirable
characteristics of the tax system have come
to be generally accepted.

1. Economic Effects

2. Equity

3. Minimum Cost of Collection and Compliance Consistent

with effective enforcement
 Arguments against taxes
on income and wealth
Taxes on income and wealth have been
criticized on the following grounds

1. Difficulty of the administration

2. Disincentive effect on savings, investment, and work.

 Income Tax

Gross Income Defined

Deductions
Optional Standard Deductions

Non-deductible Items

Personal and Additional Exemptions

Tax rate and Taxpayers

Capital Gains and Losses

Filing of Returns and Payment of tax