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What is the nature of the power of taxation?

The power of taxation is: (ILL)


1. inherent in sovereignty;
2. legislative in character;
3. subject to constitutional and inherent limitations.

What is the extent of the legislative power to tax?
Subject to constitutional and inherent restrictions, the legislature has
discretion to determine the following matters: (SPAM)
1. The subjects to be taxed;
2. The purpose or object of the tax, so long as it is a public
purpose;
3. The amount or rate of the tax; and
4. The manner, means, and agencies of collection of the tax.

What are the aspects of taxation?
The exercise of the power of taxation has two aspects:
1. Levying or imposition of the tax, which is a legislative act
(taxation); and
2. Collection of the tax levied, which is essentially administrative in
character (tax administration).
Taxation + tax administration = the taxation
System

What is the purpose of taxation?
The primary purpose of taxation on the part of government is to provide
funds or property with which to promote the general welfare and
protection of its citizens. In its broadest and most general sense, taxation
includes every imposition of charge or burden by the sovereign power
upon persons, property, or property rights for the use and support of the
government and to enable it to discharge its appropriate functions.
What are the basic principles of a sound tax system?

1. Fiscal adequacy Sources of revenue should be sufficient to
meet the demands of public expenditure. It also means that the
revenues should be capable of expanding or contracting annually
in response to variations in public expenditures.

2. Equality or theoretical justice The tax burden should be in
proportion to the taxpayers ability to pay. This is the so-called
ability-to-pay principle. Taxation should be uniform as well as
equitable.
3. Administrative feasibility Tax laws should be capable of
convenient, just, and effective administration.

What are the limitations on the power of taxation?
1. Constitutional limitations
(DECEIVE SCARE)
a. d ue process of law
b. e qual protection of the laws
c. non-impairment of the obligation of contracts
d. e xemption of religious, charitable, and educational entities,
non-profit cemeteries, and churches from property taxation
e. no imprisonment for non-payment of a poll tax
f. power of the President to veto any particular item or items in
a revenue or tariff bill;
g. e xemption of non-stock, non-profit educational institutions
from taxation;
h. non-impairment of the jurisdiction of the Supreme Court in
tax cases
i. concurrence by a majority of all the members of Congress
for the passage of a law granting tax exemption
j. no appropriation for religious purposes
k. non-infringement of religious freedom
l. e quity and uniformity of taxation
2. Inherent limitations
(JENI P)
a. territorial jurisdiction
b. exemption from taxation of government entities
c. non-delegation of the legislative power to tax
d. international comity
e. levy must be for a public purpose

What is taxation?
Taxation is the process or means by which the sovereign, through its lawmaking
body, raises income to defray the necessary expenses of
government.

What is the basis of the power to tax?

1. The power of taxation proceeds upon the theory that the existence of
government is a necessity; that it cannot continue without means to
pay its expenses; and that for these means, it has a right to compel all its
citizens and property within its limits to contribute.

2. The Benefits-Received Principle - The basis of taxation is found in
the reciprocal duties of protection and support between the state and its
inhabitants. In return for his contribution, the taxpayer receives the
general advantages and protection which the government affords the
taxpayer and his property. This is the benefits-received principle. One
is compensation or consideration for the other: protection for support and
support for protection.

What is the purpose of taxation?
The primary purpose of taxation on the part of government is to provide
funds or property with which to promote the general welfare and
protection of its citizens. In its broadest and most general sense, taxation
includes every imposition of charge or burden by the sovereign power
upon persons, property, or property rights for the use and support of the
government and to enable it to discharge its appropriate functions.