This includes income tax, Payroll levy, and other withholding taxes. No lecture notes available. A tax base for direct taxes therefore is income. The effect might be constructive to the economy or might damage the economy. Download PDF Package. In order then to avoid/minimize damage to the economy there are criteria/principles for evaluating tax systems. Key words Public finance, public sector, public revenues, public expenditures, The emphasis in this approach is put on redistribution of income, that, those with higher incomes should sacrifice more so that there can be proper and equitable redistribution of income. On this page you can read or download public finance n5 notes pdf in PDF format. Tax yield from indirect taxes will therefore depend on goods produced and services rendered in the economy. Again, the government has to intervene in order to adjust the distribution of income and wealth to ensure conference with what society considers a ‘fair’ or just state of distribution of income and wealth to ensure conformance with what society considers a ‘fair’ or just state of distribution. Direct taxes are unpopular as they directly affect the disposable income. Public Finance. In equity, a progressive rat structure and the minimum exemption policy should characterize the tax system. You can download these Public Finance and Taxation CPA study and revision notes. However the general philosophy of Benefit or ability to pay alone does not answer the question of best tax formula and hence the need for political process. Study notes By Zhipeng Yan Public Finance Harvey Rosen Chapter One: Introduction 1. Sorry, preview is currently unavailable. Nonexcludable means that no one can be prevented from consuming the good once it has been produced. WhatsApp. The government, therefore, derives its revenue from taxes. To attain the much needed equally taxes are made to be proportional, progressive or regressive depending upon whether they take from high income earners the same fraction of income as tax than they take from low income people. INTODUCTION TO PUBLIC FINANCE AND TAXATION THEORY. The amount of tax revenue (tax yield) from direct taxes will therefore depend on income of individuals and corporations. preference revelation and bureaucratic obstruction) • Covered already in EC2020 . A tax scheme which combines progressive income taxation of high income households with a subsidy to low income households. Efficiency (4.1A) (Completely) nonrival means that the cost of provision of a unit to an additional person is zero. This term is something of a misnomer, because the fundamental issues are not financial (that is, … revenue from the public by imposing taxes which revenue is used by the government to provide goods and services to the public or its citizens (to carry out government functions). To clearly understand the concept of tax base, we need to classify taxes into two classes: Direct Taxes are levies directly on the income of individuals or corporations. It involves a substantive degree of inequality especially in the distribution of capital income, and through views on distributional income justice differ, most would agree that some adjustments are required. Non of these sources however can bypass taxation in terms of bringing much revenue to the government. Taxes on some commodities are certain while on others are fairly uncertain. Based on Similar Theories. A tax is compulsory and mandatory contribution to the government from its subjects. Increase or decrease in tax rates usually does not affect the general price level. Notes - Gruber, Public Finance Chapter 7.1 Public goods Two properties deflne a pure public good: A pure public good is nonrival and nonexcludable. They provide a wide tax base and hence revenue potential. This fair or just distribution of income cannot be achieved under the market mechanism. As a subject, taxation is a study of how the government imposes on and collects taxes from, the income and wealth of individuals and corporations to finance its social and regulatory activities. CA21 Economics (notes) CA22 Management Accounting (notes) CA23 Public Finance and Taxation (notes) CPA Section 3 NOTES. To put id differently the benefits derived by anyone consuming a social good are ‘exterilised’ in that they become available to all others. faith mwendwa says: 27/02/2020 at 11:27 am please send me the notes via email. PDF. 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