Public Revenue and Taxation:

Sources of Public Revenue:

Modern states have to perform multifarious duties for promoting the welfare of their citizens. For the performance of these functions, money is needed. Every government, therefore, tries to meet its annual expenditure from taxes and from sources other than taxation. The revenue, of the state can be classified under the following heads. Continue reading.

Types of Taxes:

A tax is a compulsory contribution to the public authority to cover the cost of services rendered by state for the general benefit of its people. In the words of Plehn: Continue reading.

Canons/Principles of Taxation By Adam Smith:

Adam smith, the father of modem political economy, has laid down four principles or cannons of taxation in his famous book "Wealth of Nations". These principles are still considered to be the starting point of sound public finance. Adam Smith's celebrated cannons of taxation are: Continue reading.

Essentials/Features/Characteristics of a Good Tax System:

After discussing the principles of taxation, it is now easy for us to sum up the essentials of a good tax system. They, in brief, are as follows: Continue reading.

Theories of Taxation:

The economists have put forward many theories or principles of taxation at different times to guide the state as to how justice or equity in taxation can be achieved. The main theories or principles in brief, are: Continue reading.

Proportional Versus Progressive Taxation:

While discussing the 'ability to pay theory', we gave a passing reference to two important systems of taxation, proportional and progressive. Let us discuss both these systems of taxation in detail. Continue reading.

Taxable Capacity:

"Taxable capacity is that maximum amount which the community is in a position to bear towards the expenses of public authorities without having a really unhappy and! down-trodden existence and without dislocating the economic, organization too much". Continue reading.

Impact and Incidence of Taxation:

One of the very important subject of taxation is the problem of incidence of a tax. By incidence of taxation is meant final money burden of a tax or final resting place of a tax. It is the desire of every government that it should secure justice in taxation, but if it does not know as to who ultimately bears money burden of a tax or out of whose packet money is received, it cannot achieve equality in taxation. Continue reading.

Direct Tax and Indirect Tax:

There are two main types of taxes (1) direct tax and (2) indirect tax. Continue reading.

Diffusion Theory of Taxation:

According to diffusion theory of taxation, under perfect competition, when a tax is levied, it gets automatically equitably diffused or absorbed throughout the community. Advocates of this theory, state that: Continue reading.