This website uses cookies to ensure you have the best experience. Learn more

Canon Of Taxation By Adams Smith

2434 words - 10 pages

The famous literature on principles of taxation was embodied in Adams Smith “Canons of taxation”. Since then, economies have adopted (and adapted where necessary) these basic principles for what is regarded as the most important tool of fiscal policy.
Taxation is a compulsory levy imposed on the income, value of goods and services of individuals, partners and companies by the government. It is can be said to be an approach of imposing tax on the citizen. This imposition of tax, is expected to yield income which should be utilized in the provision of both basic and substantial infrastructural amenities, both social and security, as well as creates conditions for the economic well-being of ...view middle of the document...

This is a tax imposed directly on the taxpayer or property of the taxpayer. It is those individual taxpayers that bear the burden and the incidence of the tax, and these burdens cannot be shifted to any other persons or individuals. These taxes are imposed on income, property, company profit and capital gains.
While an indirect tax is one whose burden are transferred to other individuals usually the consumer who have purchased a good or service. This form of tax is levied on goods and services, the taxpayer can transfer both the burden and the incidence to the ultimate consumer or user of the goods or services. These could come inform of Value Added Tax, Import Duty or Export Duty.
A good tax system ought to be structured based on certain laid down principles. However, disagreements may occur as to which characteristics best define a good tax system. M. Myrsky (2012) is of the opinion that since tax system are consistently evolving and there are so many principles to appraise, it will be insufficient to classify any tax system as ‘good’ or ‘bad’. However, there are a few principles, which have been identified by economist.
This form of tax assesses a taxpayer to tax a flat rate of his or her total assessable income. Therefore, the tax paid is proportional to the taxpayer’s income, which is the same rate charged on every taxpayer irrespective of the amount of taxable income.

A system is progressive, when the rate of taxation increases as income increases. It is a tax that is based on the idea of vertical equity, which means redistribution of income from the well-to-do, to the less-to-do. This system relies on the principle of ability to pay, and it is therefore considered more equitable than either the proportional or the regressive tax system. A possible criticism is that it can produce distinctive effects by discouraging the spirit of enterprise or hard work.

A regressive tax system results when the incidence of the tax reduces with rise in income or tax base. A regressive tax is a tax, which falls more heavily on the people with low income than, on those with high income. Here, the rate of tax decreases as income increases.
Classical economist such as Adam smith, J.S Mills and J.B Say, developed canons or principles of taxations which a good tax system of any country of the world should be based on. These canons are as follows;
I. Canon of Equity
II. Canon of Convenience
III. Canon of Certainty
IV. Canon of Economy
VI Canon of Simplicity
V Canon of Flexibility
V Canon of Impartiality
V Canon of Productivity
Equity, means that the apportioning of the tax liability should be equitable. That is every taxpayer should pay a fair share of taxes. According to Deller (2004) “ Tax equity is judged on the basis of the benefit principal and ability to pay...

Find Another Essay On Canon of Taxation by Adams Smith

Preview and Predicting of the novel Peak by Roland Smith

1139 words - 5 pages action. o I enjoy action novels so I believe there is a chance I may enjoy this book. 6) Examine copyright page Copy write dates the publication of this novel to 2007. The novel was written in the United States by Roland Smith. This novel is a coming of age fiction. Summary states the book is about a 14 year old boy trying to be the youngest to reach the summit of Mount Everest. • Predict o I predict that Peak will succeed in his goal to climb

Iowa Wrestling - Tale of Warriors by Michael Smith

2416 words - 10 pages It is the dusk of autumn. Cold wind chills rush in the farmlands, bringing about their bitter and unsaturated cast, a ghastly blue fading into blackness and wilting green, the predominant colors of the time. This is no sign of despair; it's rather welcoming for the people of Iowa. This is wrestling season. Iowa Wrestling, a documentary directed by Michael Smith and narrated by Dylan McDermott, is produced by ESPN. It was televised in 2003 on

Commentary of The Hitchhiker’s Guide to the Galaxy by Douglas Adams

1264 words - 6 pages each other. The people of Earth however seem to be the black sheep. For instance, when announcing Earth’s demolition the Vogon’s expressed, “What do you mean you've never been to Alpha Centauri? Oh for heaven sake mankind it's only four light years away you know! I'm sorry but if you can't be bothered to take an interest in local affairs that's your own regard.” (28 Adams) The novel highlights absurd elements by inducting them with the

The restaurant at the end of the universe, by Douglas Adams

1866 words - 7 pages PLOT SUMMARY AND THEME OF THE NOVEL: The plot of The Restaurant at the End of the Universe, by Douglas Adams, commences when the diverse, disheveled, and, at least in the case of the paranoid android, depressed crew of the spaceship, The Heart of Gold, find themselves incapable of utilizing the ship’s infinite improbability drive to warp through hyperspace to escape the Vogon flagship’s attempts to exterminate the last of the

Causes and Consequences of Rebellion: "Mercy Among the Children" by David Adams Richards

1347 words - 5 pages In modern world, few people follow Christ's philosophy of non-violence. In fact, most people follow the philosophy of revenge and payback. The reason for people not following the philosophy of non-violence lies in its difficulty and the belief that people will take advantages of them. In the novel of "Mercy Among the Children" by David Adams Richards. The author uses the devices of point of view, narrative structure and characterization to

The Influence of the Family Members on the Life of Francie Nolan by Betty Smith

795 words - 3 pages The Influence of the Family Members on the Life of Francie Nolan The main character in A Tree Grows in Brooklyn by Betty Smith, is certainly the brilliant and resourceful Francie Nolan, however, three other characters in the novel deserve credit for guiding Francie through her troublesome childhood. Francie Nolan grows up in the slums of Williamsburg, Brooklyn in the early 1900s. Despite Francie’s lifestyle of poverty and distress, she manages

The Wealth of Nations by Adam Smith: THe Beginning of Capitalism

2680 words - 11 pages amount of freedom and the most effective economic gains of any economic system ever devised (Anderson, 2001). In 1776, Adam Smith created a publication called “The Wealth of Nations,” which was the beginning of Capitalism (Anderson, 2001). His theory stated that the wealth of nations could be increased by allowing the individual to seek their own self-interest and removal of governmental control over the economy (Anderson, 2001). There are

The Literary Use of Religion by John Smith and William Bradford

689 words - 3 pages The Literary Use of Religion by John Smith and William Bradford Religion plays a major role in the day to day lives of the early settlers in America. So much so, that early colonial writers use it as a form of literary persuasion. John Smith and William Bradford were two such writers. Smith and Bradford use religion as a literary tool to persuade the reader towards their own interests. There are similarities and differences in the

Psychotherapy is the Practice of Psychology, by Lee Sechrest and Bradley Smith

946 words - 4 pages integration of psychotherapy into psychology would create a discipline rooted in science, grounded by a large body of knowledge and theory, and abled to be more flexible and innovative (Sechrest & Smith, 2012). Details regarding the multiple barriers which have prevented integration are presented. Additionally, the authors claim the discipline of psychology, clinicians practicing psychotherapy, and clients in therapy would all benefit from

The Suicide of Eva Smith in An Inspector Calls by J.B. Priestley

3018 words - 12 pages The Suicide of Eva Smith in An Inspector Calls by J.B. Priestley The play "An Inspector Calls", was written by J.B. Priestly in 1945, following the end of World War II. It is set in 1912, two weeks before the Titanic set sail, and two years before World War I began. It was a time of political unrest. The working class were attempting to gain higher wages, and in places they couldn't, strikes occurred. A strike had

Free Trade and Globalization in The Wealth of Nations by Adam Smith

1255 words - 6 pages licensing rules (“Investopedia,” n.d). Removing such barriers allows international trade occur easier and countries are able to put to practice the comparative advantage aspect in relation to other economies. 
 In Adam Smiths paper “The Wealth Of Nations” paper by Adam Smiths projects the view on international trade as not a zero sum equation resulting in being beneficial to all parties involved eventually. By enacting a policy of free trade Smith

Similar Essays

Analysis Of Watership Down By Richard Adams

1043 words - 5 pages The title of this book is Watership Down, and it was written by Richard Adams. The story is about a group of rabbits who run away from their warren, or their pack, after learning that their lives were in danger. These rabbits listen to the forewarning of one inferior rabbit with big powers, this rabbit can predict the future. After hearing the forewarning of the aforementioned rabbit, Fiver, the group runs away from their warren, with Fiver’s

Book Of Mormon By Joseph Smith

3289 words - 13 pages Book of Mormon by Joseph Smith The 1830 publication of the “Book of Mormon” by Joseph Smith, officially established the Church of Jesus Christ of Latter-day Saints. Members of the Church of Jesus Christ believe that Smith, under divine guidance, translated a set of golden plates into the Book of Mormon. This was the first of several literary works that were said to contain proper doctrine of the beliefs and views of the Mormon

Analysis Of A Description Of New England By John Smith

663 words - 3 pages Analysis of A Description of New England by John Smith The author John Smith, a pilgrim who arrived to the Americas, wrote a description of the new land in his book “ A Description of New England ”. In this book Smith shows a wonderful world of vast food and pleasure. Also, William Bradford another pilgrim who arrived to Plymouth on the coast of Massachusetts, wrote a book called “ Of Plymouth Plantation ” in which he describes what really

Laissez Faire In The Wealth Of Nations By Adam Smith

869 words - 4 pages Smith theorized that the economy could be run entirely by consumer interest in his book The Wealth of Nations. Smith has become labeled by many as “the father of modern economics,” however his policy is quite simple, there should be a hands off policy by the government. This means no government interference so that the marketplace will involve only private businesses and consumers. In this way the businesses will be dependent upon the consumers and