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    Basic Principles of A Sound Tax System

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    Alvin Niño
    This document outlines the basic principles of a sound tax system: 1) Fiscal adequacy - taxes should be sufficient to meet government expenditures and adjust to changes in spending. 2) Administrative feasibility - tax laws should be enforceable and close loopholes to prevent evasion or fraud. 3) Theoretical justice or equity - taxes should be based on taxpayers' ability to pay. It also notes that while a tax law may still stand if it violates the first two principles, a law violating theoretical justice/equity would be unconstitutional and void.

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    Basic Principles of A Sound Tax System

    Uploaded by

    Alvin Niño
    64 views1 page
    This document outlines the basic principles of a sound tax system: 1) Fiscal adequacy - taxes should be sufficient to meet government expenditures and adjust to changes in spending. 2) Administrative feasibility - tax laws should be enforceable and close loopholes to prevent evasion or fraud. 3) Theoretical justice or equity - taxes should be based on taxpayers' ability to pay. It also notes that while a tax law may still stand if it violates the first two principles, a law violating theoretical justice/equity would be unconstitutional and void.

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    This document outlines the basic principles of a sound tax system: 1) Fiscal adequacy - taxes should be sufficient to meet government expenditures and adjust to changes in spending. 2) Administrative feasibility - tax laws should be enforceable and close loopholes to prevent evasion or fraud. 3) Theoretical justice or equity - taxes should be based on taxpayers' ability to pay. It also notes that while a tax law may still stand if it violates the first two principles, a law violating theoretical justice/equity would be unconstitutional and void.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    64 views1 page

    Basic Principles of A Sound Tax System

    Uploaded by

    Alvin Niño
    This document outlines the basic principles of a sound tax system: 1) Fiscal adequacy - taxes should be sufficient to meet government expenditures and adjust to changes in spending. 2) Administrative feasibility - tax laws should be enforceable and close loopholes to prevent evasion or fraud. 3) Theoretical justice or equity - taxes should be based on taxpayers' ability to pay. It also notes that while a tax law may still stand if it violates the first two principles, a law violating theoretical justice/equity would be unconstitutional and void.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Basic Principles of A Sound Tax System

    F-A-T-(E)

    1. Fiscal Adequacy - sufficient to meet governmental expenditures; revenues should be elastic or


    capable of expanding or contracting annually in response to variations to public expenditure.
    2. Administrative feasibility – capable of being effectively enforced; tax laws should close-up the
    loopholes for tax evasion and deter unscrupulous officials from committing fraud.
    3. Theoretical justice or equity – based on the taxpayer’s ability to pay
    4. (Economic Elasticity) – requires a tax law be elastic; it need not be amended every time the
    government needs funds.

    What is the effect if a tax law is not fiscally adequate? Will it make the law void ab initio?
    - No. The remedy is to pass another law or to amend to make it fiscally adequate.

    If the tax law violates administrative feasibility, will be void?

    - No. Again, amend or pass another law.

    If the tax law violates theoretical justice or equity, will it be void?

    - Yes. Because it is required under the constitution. Of the three principles, only theoretical
    justice is expressly provided for in the Constitution.

    Scope: To Determine –

    1. Purpose
    2.

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