Topic: Taxation

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🔗 Georgism – Single Tax System

🔗 Economics 🔗 Politics 🔗 Basic Income 🔗 Taxation 🔗 Libertarianism

Georgism, also called geoism and single tax (archaic), is an economic ideology holding that while people should own the value they produce themselves, economic value derived from land (often including natural resources and natural opportunities) should belong equally to all members of society. Developed from the writings of American economist and social reformer Henry George, the Georgist paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance which attempt to integrate economic efficiency with social justice.

Georgism is concerned with the distribution of economic rent caused by natural monopolies, pollution and the control of commons, including title of ownership for natural resources and other contrived privileges (e.g. intellectual property). Any natural resource which is inherently limited in supply can generate economic rent, but the classical and most significant example of land monopoly involves the extraction of common ground rent from valuable urban locations. Georgists argue that taxing economic rent is efficient, fair and equitable. The main Georgist policy recommendation is a tax assessed on land value. Georgists argue that revenues from a land value tax (LVT) can be used to reduce or eliminate existing taxes (for example, on income, trade, or purchases) that are unfair and inefficient. Some Georgists also advocate for the return of surplus public revenue to the people by means of a basic income or citizen's dividend.

Economists since Adam Smith and David Ricardo have observed that a public levy on land value does not cause economic inefficiency, unlike other taxes. A land value tax also has progressive tax effects. Advocates of land value taxes argue that they would reduce economic inequality, increase economic efficiency, remove incentives to underutilize urban land and reduce property speculation. The philosophical basis of Georgism dates back to several early thinkers such as John Locke, Baruch Spinoza and Thomas Paine, but the concept of gaining public revenues mainly from land and natural resource privileges was widely popularized by Henry George and his first book Progress and Poverty (1879).

Georgist ideas were popular and influential during the late 19th and early 20th century. Political parties, institutions and communities were founded based on Georgist principles during that time. Early devotees of Henry George's economic philosophy were often termed Single Taxers for their political goal of raising public revenue mainly from a land value tax, although Georgists endorsed multiple forms of rent capture (e.g. seigniorage) as legitimate. The term Georgism was invented later and some prefer the term geoism to distinguish their beliefs from those of Henry George.

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🔗 Taxation of illegal income in the United States

🔗 United States 🔗 Law 🔗 Taxation

Taxation of illegal income in the United States arises from the provisions of the Internal Revenue Code (IRC), enacted by the U.S. Congress in part for the purpose of taxing net income. As such, a person's taxable income will generally be subject to the same Federal income tax rules, regardless of whether the income was obtained legally or illegally.

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🔗 Chicken tax

🔗 United States 🔗 International relations 🔗 Finance & Investment 🔗 Economics 🔗 Politics 🔗 Trade 🔗 Automobiles 🔗 Taxation

The Chicken Tax is a 25 percent tariff on light trucks (and originally on potato starch, dextrin, and brandy) imposed in 1964 by the United States under President Lyndon B. Johnson in response to tariffs placed by France and West Germany on importation of U.S. chicken. The period from 1961–1964 of tensions and negotiations surrounding the issue was known as the "Chicken War," taking place at the height of Cold War politics.

Eventually, the tariffs on potato starch, dextrin, and brandy were lifted, but since 1964 this form of protectionism has remained in place to give U.S. domestic automakers an advantage over competition (e.g., from Japan, Turkey, China, and Thailand). Though concern remains about its repeal, a 2003 Cato Institute study called the tariff "a policy in search of a rationale."

As an unintended consequence, several importers of light trucks have circumvented the tariff via loopholes, known as tariff engineering. Ford (ostensibly a company that the tax was designed to protect), imported its first-generation Transit Connect light trucks as "passenger vehicles" to the U.S. from Turkey, and immediately stripped and shredded portions of their interiors (e.g., installed rear seats, seatbelts) in a warehouse outside Baltimore. To import vans built in Germany, Mercedes "disassembled them and shipped the pieces to South Carolina, where American workers put them back together in a small kit assembly building." The resulting vehicles emerge as locally manufactured, free from the tariff.

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🔗 Negative income tax

🔗 Economics 🔗 Basic Income 🔗 Taxation

In economics, a negative income tax (NIT) is a welfare system within an income tax where people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government.

Such a system has been discussed by economists but never fully implemented. According to surveys however, the consensus view among economists is that the "government should restructure the welfare system along the lines" of one. It was described by British politician Juliet Rhys-Williams in the 1940s and later by American free-market economist Milton Friedman.

Negative income taxes can implement a basic income or supplement a guaranteed minimum income system.

In a negative income tax system, people earning a certain income level would owe no taxes; those earning more than that would pay a proportion of their income above that level; and those below that level would receive a payment of a proportion of their shortfall, which is the amount their income falls below that level.

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🔗 List of countries by tax rates

🔗 Taxation

A comparison of tax rates by countries is difficult and somewhat subjective, as tax laws in most countries are extremely complex and the tax burden falls differently on different groups in each country and sub-national unit. The list focuses on the main indicative types of taxes: corporate tax, individual income tax, and sales tax, including VAT and GST, but does not list capital gains tax.

Some other taxes (for instance property tax, substantial in many countries, such as the United States) and payroll tax are not shown here. The table is not exhaustive in representing the true tax burden to either the corporation or the individual in the listed country. The tax rates displayed are marginal and do not account for deductions, exemptions or rebates. The effective rate is usually lower than the marginal rate. The tax rates given for federations (such as the United States and Canada) are averages and vary depending on the state or province. Territories that have different rates to their respective nation are in italics.

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🔗 Companies of the United States with untaxed profits

🔗 United States 🔗 Companies 🔗 Taxation

Companies of the United States with untaxed profits deals with those U.S. companies whose offshore subsidiaries earn profits which are retained in foreign countries to defer paying U.S. corporate tax. The profits of United States corporations are subject to a federal corporate tax rate of 21%. In principle, the tax is payable on all profits of corporations, whether earned domestically or abroad. However, overseas subsidiaries of U.S. corporations are entitled to a tax deferral of profits on active income until repatriated to the U.S., and are regarded as untaxed. When repatriated, the corporations are entitled to a foreign tax credit for taxes (if any) paid in foreign countries.

Retaining such profits offshore may be regarded as a tax strategy. Many corporations have accumulated substantial untaxed profits offshore, especially in countries with low corporate tax rates. In recent years it has been estimated that untaxed profits range from US$1.6 to $2.1 trillion. The Wall Street Journal noted that the "[u]ntaxed foreign earnings are part of a contentious debate over U.S. fiscal policy and tax code." The profits earned abroad and retained there are subject to a foreign exchange risk, besides other financial risks.

The downside of a strategy of retaining profits offshore is that corporations may want or need to pay dividends to shareholders, or to make investments in the United States, besides other reasons. The alternative may be to borrow funds in the U.S., or access the funds retained offshore in the form of inter-company loans.

The Tax Cuts and Jobs Act of 2017 (TCJA) imposed a one time tax on these offshore profits at 8% (non-cash) and 15.5% (cash) respectively. The Act also includes a provision that taxes all foreign profits in the US in the year they are earned ending the ability of US companies to defer paying US tax on unrepatriated earnings.

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🔗 List of countries by tax revenue to GDP ratio

🔗 Taxation

This article lists countries alphabetically, with total tax revenue as a percentage of gross domestic product (GDP) for the listed countries. The tax percentage for each country listed in the source has been added to the chart.

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🔗 Land Value Tax

🔗 Economics 🔗 Taxation

A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements. It is also known as a location value tax, a site valuation tax, split rate tax, or a site-value rating,

Land value taxes are generally favored by economists as they do not cause economic inefficiency, and reduce inequality. A land value tax is a progressive tax, in that the tax burden falls on land owners, because land ownership is correlated with wealth and income. The land value tax has been referred to as "the perfect tax" and the economic efficiency of a land value tax has been accepted since the eighteenth century. Economists since Adam Smith and David Ricardo have advocated this tax because it does not hurt economic activity or discourage or subsidize development.

LVT is associated with Henry George, whose ideology became known as Georgism. George argued that taxing the land value is most logical source of public revenue because the supply of land is fixed and because public infrastructure improvements would be reflected in (and thus paid for) by increased land values.

Land value taxation is currently implemented throughout Denmark, Estonia, Lithuania, Russia, Singapore, and Taiwan; it has also been applied to lesser extents in parts of Australia, Mexico (Mexicali), and the United States (e.g., Pennsylvania).