Evaluation Taxes

Name:

Course:

Institution:

Instructor:

Date:

Evaluation Taxes

Major Taxation Evaluation Criteria

Economic Efficiency

Tax distortion behavior alters and reduces economic efficiency to an extent. A policymaker’s objective is to implement taxation policies that would minimize those distortions. Tax reductions are usually less troublesome to marketing resource allocations than the usual targeted tax policies. Targeting enormously affects economic efficiency through resource allocation, administrative cost and incentives (Ballard, 1985). Through resource allocation, targeted tax credit lower prices of approved governmental activities while elevating other prices all through the economy. Taxpayers’ behavior and operational efficiency are disrupted by the distortion of the relative prices. This in effect gives the government the mandate on where the resources should be allocated.

The administrative cost entails clemency under certain conditions. The higher the cost of incurrence for record keeping, filing, tracking and monitoring, the more the tax credit is targeted. This, however, directly reduces the tax credit benefits and redirects resources from their prolific uses. The incentive effects of taxes affect economical demeanor and making of decisions. This directly reflects on the economy (Brimley, 2005). Hence, it is noted that broad-based tax reductions are favorable for economical growth because an increase of resource flow to production is influenced by the incentive effect.

Equity

The base of equity consideration is usually the ability of an individual to pay taxes. The only legal way in benefiting from the aspect of equity tax evaluation is through paying in proportion the benefits that they receive. The tax rate structures that are laid claim the base percentage of the tax and their structure revolve around tax distribution rates across each visible base (Mular, 2002). To make the tax rate effective, the net taxpayers’ rate on the income should take all taxation forms.

Adequacy

In taxation, this entails three legal aspects. These are the revenue raising capacity, tax elasticity and revenue stability. Revenue raising capability deals with the tax ability to produce a specific amount of revenue at a rational rate. Tax elasticity deals with monitoring tax revenues with changes in incomes. Lastly, revenue stability handles the aspect of revenue fluctuation in relation to the constant time (Kirchler, 2007). Hence, the government should be able to foretell and budget on revenues to cater for any fluctuations encountered.

Feasibility

In taxation, there is the administrative and the political feasibilities. In administrative feasibility, there is a usual set of administrative taxation costs and compliance costs. These aspects deal with the efforts of both the government and the taxpayer to collect and comply with taxes respectively. In political feasibility, the tackled aspects are tax exportations and visibility. In tax exportations, tax revenues are usually paid by the non-residents of the country and the popularity of tax increases with the level of exportation. In visibility, tax popularity decreases with the level of increased visibility and the extent of people noticing other aspects about taxation (Ballard, 1985).

Federal Income Tax and State-general Sales Tax

The state-general sales tax is payable by users, consumers and to people receiving services that are taxable in the law. If a lesser qualifies as merchant, they apply for a valid sale tax certificate to collect the proper taxes from customers. In this case, file returns with the Department of Revenue. A lesser qualifies as a dealer subject to tax collection requirements if:

• They lease, rent or sell material personal property in the state.
• They endow services under the statute of the state that are taxable.
• They resell state held properties; and manage to maintain a business location in the state (Crundwell, 2008).
• They operate in the state as resident or non-resident agents either as full time or as part time.
• They preserve an inventory in the state of tangible personal property. These properties are mainly for lease, rental, or deliver.

The state-general sales tax has a taxable base that includes the amount that tangible personal properties are sold (Brimley, 2005). These also include services that are rendered by seller connections of sale. The amount charged for lease of personal property is the gross amount normally charged for taxation services.

Federal income tax is a system overseen by the Internal Revenue Services. The IRS collects money based on ones own earned income. The federal income tax returns are later on generally filed annually. There is a clear-cut difference between income tax and federal income tax. The difference can be noted on how the state level handles the levy income taxes. The amount of federal income tax is usually determined IRS using pre-determined tax brackets. The function of the federal income tax is to help the relevant government for example the United States (Kirchler, 2007), to finance their public works, national security and help clear off their national debt. The president also gets his fair share of salary from the federal income tax.

References

Ballard, C. L. (1985). A General equilibrium model for tax policy evaluation. New York, NY: University of Chicago.

Brimley, V. & Garfield R. R. . (2005).Financing education in a climate of change. Boston, MA: Pearson/Allyn and Bacon.

Crundwell, F. K., (2008). Finance for Engineers: Evaluation and Funding of Capital Projects. New York, NY: Springer.

Kirchler, E. (2007). The economic psychology of tax behaviour. New York, NY: CambridgeUniversity.

Mular, A. L., Halbe, D. N., & Derek John Barratt. (2002). Mineral processing plant design, practice, and control proceedings. Boston, MA: SME.

Last Completed Projects