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Several theories of taxation exist in public economics. Governments at all levels (national, regional and local) need to raise revenue from a variety of sources to finance public-sector expenditures .
The basic principle of excise duties was that they were taxes on the production, manufacture, or distribution of articles which could not be taxed through the customs house, and revenue derived from that source is called excise revenue proper. The fundamental conception of the term is that of a tax on articles produced or manufactured in a country.
By the American Civil War, the principle of taxation of property at a uniform rate had developed, and many of the states relied on property taxes as a major source of revenue. However, the increasing importance of intangible property, such as corporate stock, caused the states to shift to other forms of taxation in the 1900s.
This taxation of income reflected the increasing amount of wealth held in stocks and bonds rather than property, which the federal government had taxed in the past. [76] The Revenue Act of 1862 established the first national inheritance tax and added a progressive taxation structure to the federal income tax, implementing a tax of five percent ...
Top marginal tax rate of the income tax (i.e. the maximum rate of taxation applied to the highest part of income) The concept of taxing income is a modern innovation and presupposes several things: a money economy, reasonably accurate accounts, a common understanding of receipts, expenses and profits, and an orderly society with reliable records.
Laffer explains the model in terms of two interacting effects of taxation: an "arithmetic effect" and an "economic effect". [7] The "arithmetic effect" assumes that tax revenue raised is the tax rate multiplied by the revenue available for taxation (or tax base). Thus revenue R is equal to t × B where t is the tax rate and B is the taxable ...