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Under the benefit theory, tax levels are automatically determined, because taxpayers pay proportionately for the government benefits they receive. In other words, the individuals who benefit the most from public services pay the most taxes.
The benefit principle takes a market-oriented approach to taxation. The objective is to accurately determine the optimal amount of revenue that should be spent on public goods. More equitable/fair because taxpayers, like consumers, would "pay for what they get" Taxes are more akin to prices that people would pay for government services
Voluntary taxation is a theory that states that taxation should be a voluntary act. Under the theory, people should have the option to pay taxes instead of being forced to pay taxes by their government. Under this theory, the people would control how much they pay and where they spend it.
Optimal tax theory or the theory of optimal taxation is the study of designing and implementing a tax that maximises a social welfare function subject to economic constraints. [1] The social welfare function used is typically a function of individuals' utilities , most commonly some form of utilitarian function, so the tax system is chosen to ...
In public choice theory, tax choice (sometimes called taxpayer sovereignty, [1] earmarking, participatory taxation or fiscal subsidiarity [2] [failed verification]) is an emerging type of citizen sourcing in which individuals or groups of taxpayers decide how to allocate part of their taxes of a municipal or public budget appropriation through ...
In economics, the Laffer curve illustrates a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. The Laffer curve assumes that no tax revenue is raised at the extreme tax rates of 0% and 100%, meaning that there is a tax rate between 0% and 100% that maximizes government tax revenue. [a ...
distributional effects of taxation and government expenditures [4] analysis of market failure [5] and government failure. [6] Emphasis is on analytical and scientific methods and normative-ethical analysis, as distinguished from ideology. Examples of topics covered are tax incidence, [7] optimal taxation, [8] and the theory of public goods. [9]
Tax policy refers to the guidelines and principles established by a government for the imposition and collection of taxes. It encompasses both microeconomic and macroeconomic aspects, with the former focusing on issues of fairness and efficiency in tax collection, and the latter focusing on the overall quantity of taxes to be collected and its ...