Scribd Logo
Upload

Welcome to Scribd!

  • A Primer On Taxation and Development: Richard M. Bird

    Uploaded by

    jassiethelassie
    6 views9 pages
    This document discusses approaches to taxation including benefit taxation where individuals pay taxes equal to the marginal benefits received from public goods and services, and redistributive taxation where taxes are paid in proportion to ability to pay. The objectives of tax policy are described as growth, distribution, and stabilization. Growth involves using tax revenues for public investment and incentives for private investment. Distribution addresses unequal income distribution and how redistributive taxes can promote growth. Stabilization involves making the tax system elastic to income changes. Administrative constraints and designing personal income taxes that are fair but don't discourage labor are also covered. Successful tax reform requires clearly stating objectives, relating policy to objectives, empirical assessment, and understanding context.

    Original Description:

    Original Title

    Bird

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document discusses approaches to taxation including benefit taxation where individuals pay taxes equal to the marginal benefits received from public goods and services, and redistributive taxation where taxes are paid in proportion to ability to pay. The objectives of tax policy are described as growth, distribution, and stabilization. Growth involves using tax revenues for public investment and incentives for private investment. Distribution addresses unequal income distribution and how redistributive taxes can promote growth. Stabilization involves making the tax system elastic to income changes. Administrative constraints and designing personal income taxes that are fair but don't discourage labor are also covered. Successful tax reform requires clearly stating objectives, relating policy to objectives, empirical assessment, and understanding context.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    6 views9 pages

    A Primer On Taxation and Development: Richard M. Bird

    Uploaded by

    jassiethelassie
    This document discusses approaches to taxation including benefit taxation where individuals pay taxes equal to the marginal benefits received from public goods and services, and redistributive taxation where taxes are paid in proportion to ability to pay. The objectives of tax policy are described as growth, distribution, and stabilization. Growth involves using tax revenues for public investment and incentives for private investment. Distribution addresses unequal income distribution and how redistributive taxes can promote growth. Stabilization involves making the tax system elastic to income changes. Administrative constraints and designing personal income taxes that are fair but don't discourage labor are also covered. Successful tax reform requires clearly stating objectives, relating policy to objectives, empirical assessment, and understanding context.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 9

    A Primer on Taxation and Development

    Richard M. Bird

    Approaches to Taxation
    BENEFIT TAXATION
    Equity Pay for what you get. Efficiency Each individual will pay a marginal tax for collective goods and services that is just equal to the marginal benefits he or she receives.

    REDISTRIBUTIVE TAXATION
    Tax paid in proportion to ability to pay. The principal aim of redistributive taxation is not to make the poor poorer nor richer.

    Objectives of Tax Policy


    Growth Distribution Stabilization

    GROWTH
    To provide the resources needed for public sector capital formation and other necessary development-related expenditures. Many countries have considered to encourage private investments in new physical capital through tax incentives.

    DISTRIBUTION
    The characteristically unequal distribution of income in poor countries should at least have the virtue of permitting a higher rate of economic growth. In other countries where rich spend rather than save, redistributive tax policy is a more efficient way of producing growth.

    STABILIZATION
    The characteristic of the tax system most relevant to the objective of price level and balance of payments stability is its elasticity with respect to the changes in the level of income. Properly structured taxes can help loosen both the immediate and the long-term import constraint on growth.

    ADMINISTRATIVE CONSTRAINT
    Administrative aspect of taxation is overwhelmingly important. Any necessary interventionist component of tax policy should be as general in nature as possible and should not depend on the discretionary decisions of officials.

    PERSONAL INCOME TAX


    Personal income tax is the only significant component of tax system which has the potential of being fair. Increasing income tax will discourage entry into the labor force.

    TAX REFORM AND TAX DESIGN


    Tax reforms are constrained by countless political and social conditions peculiar to that country and time. Prerequisites for a successful tax reform: (1)explicit statement of policy objectives (2)theoretical model explicitly relating the instruments to the objectives (3)empirically grounded assessment of all relevant initial and final conditions (4)clear understanding of political, social and economic context

    You might also like