Public Finance: Understanding Taxes, Budget, and Revenue
Item 1: Public Finance – Concept, Subject, and Field
What are the criteria by which social actors of a system can take their economic decisions?
In contemporary societies, the criteria under which the various agents make their decisions are two: the market and the authority, which can differentiate between the private economy and public economics.
According to economic decisions, what are the criteria taken by social agents of a system governed by the market?
As part of the private economy, it is a decentralized system. Decisions are made in accordance with the principles set by the market or price system: consumer sovereignty and limited benefit.
Public Finance and Public Economics: Can they be taken as synonymous? Or, conversely, is there any difference between them? If so, what is this difference or differences?
They should not be taken as synonyms. In fact, the Treasury is only one part of the Public. Its field of study is limited by the content, causes, and effects of programs of public revenue and expenditure.
What gives content to the public sector in the strict sense?
The public sector comprises only, in a narrow sense, institutional units whose decisions are taken by an authority and imposed coercively. Its main function is to produce goods and services not intended for sale and engage in the redistribution of income and wealth. Its resources are obtained through compulsory payments from other units and parts of the system.
What is the difference between the strictly public sector and the wider public sector regarding their content?
The difference is that while the public sector, strictly speaking, does not produce goods and services for sale, the broader public sector applies or uses, even partially, the guiding principles and elements of the market to support economic decisions.
What is the main economic function of the institutional units that make up the government?
Its main economic function is to produce collective goods and services not intended for sale and engage in the redistribution of income and wealth. Its resources are obtained through compulsory payments made by other units and sections of the system.
What is the cause or nature of the resources with which the government finances its activities?
The resources required are obtained through payments made by other units and sectors of the system.
Express the rate of income that refers to the individual tax burden by clarifying what the terms used mean.
The individual tax burden can be defined through three different formulas:
- C = T / r, where T is the income taxes paid and r is income.
- C = T / (r – v), where v is the minimum living subsistence that remains of our income.
- C = (T – S) / (r – v), where S is the subsidies received from the public sector.
Item 2: Public Finance Functions
State the basic social objectives whose achievement is channeled both through economic activity and public policy processes.
The aims that society has raised are: the optimal allocation of resources among alternative uses, equitable distribution of income and wealth among all members of society, and ultimately, economic growth with a stable system.
The optimal allocation of resources is a basic social purpose. State the requirements to be met by social actors in the market for the attainment of this purpose.
All actors, whether applicants or bidders, are price takers. In addition, utility functions or production of each are completely independent of the other officers. All of them are assumed to have rational behavior, in which profit maximization and utility are the only reasons for action of each market. Also, there is absolute respect for individual preferences.
The optimal allocation of resources is a basic social purpose. State the conditions that have to be in the market for this purpose to be achieved.
There are no barriers to entry or exit, and furthermore, there is absolute transparency, i.e., the information must be complete and available to all at no cost.
The optimal allocation of resources is a basic social purpose. State the conditions that have to be verified for goods and services exchanged for the market to reach this end.
They must meet five basic features:
- Homogeneous
- Perfectly divisible
- Subject to exclusive appropriation by price
- Non-rival consumption (joint non-bid)
- Absence of external effects, both in production and consumption.
List the notes characterizing social needs.
The characterizing features are:
- They are part of the consumer preference scheme.
- Goods and services that satisfy them are given the combination of supply.
- Inability to apply the principle of exclusion to goods and services that meet them.
Provide three examples of public goods that meet societal needs.
The services of law and order, national defense, and foreign service (embassies, consulates, etc.).
When does one say that a good generates external effects?
When its production or consumption affects actors other than its producers and consumers directly, without such interaction being reflected in the market price of such good or service.
Why, when the production of goods generates positive externalities for the consumer, does the public sector have to intervene in the provision?
When the market ceases to be the mechanism that automatically adjusts the individual preferences of consumers with the production conditions of the bidders, it leads to a balance of production that is insufficient in some cases and overabundant in others. This makes some form of corrective public intervention imperative.
Why, when the production of a good generates negative externalities for consumption, must the public sector seek to restrict its supply?
When the market ceases to be the mechanism that automatically adjusts the individual preferences of consumers with the production conditions of the bidders, it leads to a balance of production that is insufficient in some cases and overabundant in others. This makes some form of corrective public intervention imperative.
What ultimately distinguishes social needs from preference shares?
The prioritized needs are satisfied by goods and services that are rival in consumption and excludable by price. Therefore, in principle, the market itself is capable of achieving optimal provision from a technical standpoint.
Typically, what are the reasons given to justify public interference in the private sphere in the case of preferred requirements and penalties for undesirable ones?
The arguments used are:
- Ignorance and/or consumer irrationality.
- Strong presence of externalities.
- Strategic importance in the politics of redistribution of income and wealth.
In the optimal allocation of resources, why should the production with increasing returns to scale make public intervention indispensable?
This is a situation that normally occurs in those industries producing basic supplies that require a large initial investment or establishment due to the large size of the plant (electricity, water, railways, etc.).
When we speak of the functional distribution of income, exactly what are we talking about?
We are referring to how the result of the production process is awarded among the different factors (labor, capital, etc.) that have contributed to it.
What difference, if any, is there in talking about intergenerational and intragenerational distribution of income?
Intergenerational distributions refer to how income is distributed among the members of the same generation, while intragenerational distribution refers to the way it is distributed across a number of generations within our national reality.
Item 3: Budget and Public Expenditure
State the causes to which the late emergence of the budget as a basic tool of public actions has been conventionally attributed.
There are three reasons:
- The fragmentation and dispersal of public affairs that existed in medieval and modern societies.
- The fact that, well into the nineteenth century, the public sector of Western economies had little relevance.
- Because the budget is an institution closely linked to the political systems of representative democracy, and these did not have widespread implantation until the second half of the nineteenth century.
List the phases of the budget cycle, showing who is the protagonist of each of them and what their most common duration is.
The phases are:
- Preparation by the executive (6 months).
- Discussion and adoption by the legislature (3 months).
- Judicial control (1 year) and legislative control (3 months).
The total duration is approximately two years.
What tends to happen in the event that, at the end of the calendar year, the Government fails to approve the budget for the coming year in Parliament?
If rejected, the budget is returned to the Executive to be remade according to the requirements imposed by the legislature. Meanwhile, there is an automatic extension of the previous budget, within limits.
What is the famous Golden Rule of Classical Budget Finance?
Also called the Principle of Annual Budget Balance, it established that budgetary expenditures were to be funded in full by ordinary income.
What is the content of the budgetary principle of the Gross Budget?
This accounting principle corresponds to the political principle of universality and stipulates that the budget should always appear on a gross basis, i.e., without any kind of netting or deductions.
How many budgetary controls normally exist? What are they?
There are two purposes that such control meets: one of a political nature and one of an economic-financial nature. In order to achieve these two goals, there are three kinds of budgetary control: administrative, judicial, and political (the latter two being internal or external).
When one says that the state budget is a forecast with the force of law, what exactly are they trying to say?
This means that the draft budget is more than just an estimate and also more than just a financial plan; it is legally binding on the Government and the Administration, both politically and legally.
What is meant by the doctrine of the name “discharge of the Executive”?
Political control is exercised by the Parliament since it is precisely the Parliament that gave the mandate to the state administration. Once the administration has accounted for the completion of the approved budget, Parliament grants a discharge.
Item 4: Public Revenue
State the main component parts of the heading “Public Revenue Contract” in the general classification of them.
There are four:
- Income or income from assets owned by the public sector.
- The proceeds from the sale of publicly owned assets.
- Public Prices.
- Public debt.
What are the kinds of taxes to be considered today?
There are three forms of taxes to be considered at present: taxes, which are the most important today; fees; and special contributions.
What is meant by the subject of a tax assessment?
The purpose of assessment is the statement made by the law regulating the tax in question, indicating the economic power that it seeks to subject to taxation.
What is meant by the taxable event of a charge?
The taxable event is the enumeration of all scenarios and circumstances that, when performed by a person, automatically give rise to a corresponding tax liability.
What is the positive definition of taxable transactions in tax technique?
In financial technique, such delimitation is made by the statement of the assumptions for the taxation in question.
What is the negative definition of taxable transactions in tax technique?
It consists of the explicit mention of those acts, facts, and assumptions that in no case satisfy the purpose of assessment, even though it may seem so.
What is the main difference between a case of non-subjection to tax and an exemption from it?
With the assumptions of non-subjection, what is intended is to warn of what in no case is subject to the tax under consideration because they are not part of its subject to tax. With exemptions, what is intended is to exclude acts or businesses that fall squarely in the categories that the tax is intended to tax, but for one reason or another are exempted from effective taxation.
Distinguish between the taxpayer and the taxable person of a tax.
Contributors are those who will effectively bear the economic burden that the tax has to be accompanied by, the holders of economic power that the tax in question is set to tax. Taxable persons or responsible persons are those who assume all other obligations (statements, settlements, etc.).
What is meant by a tax base?
The tax base is the quantification of the taxable event by implementing the procedures contained in the rule itself regulating the charge in question.
According to the quantification of their tax base, what kinds of taxes should be considered?
There are two:
- Ad valorem tax, when the taxable event is quantified in money.
- The unit tax (or lump sum), when the taxable income is quantified by an amount other than money.
What are the procedures to access the tax base?
Regarding the procedures for encrypting databases, it should be noted that, in most tax jurisdictions, two different types often coexist: direct assessments on the one hand and, secondly, indices or fixed rates.
Conceptual definition of what is meant by tax progressivity.
It is the distinguishing characteristic of certain ad valorem taxes, under which the rate at which tax rates increase or decrease, and therefore their shares, is higher than the increase or decrease in the base on which these rotate.
Conceptual definition of the elasticity of collection/tax base.
Elasticity, as seen in all economic analyses, is only an index to assess and measure the sensitivity of the dependent variable—here, the tax or tax collected—to changes experienced by the independent variable—here, the base on which the tax rotates.
What are the fundamental requirements imposed by compliance with the principle of tax equity?
In the tax area, it involves giving full satisfaction and simultaneously to two ideas/basic requirements: Horizontal Equity, which is ideal to give equal treatment to equals, which ultimately involves the generality of the tax; and Vertical Equity, an ideal that requires treating unequals unequally, adjusting the treatment to actually existing inequalities.
What is the content of the principle of adequate tax?
The variety of tax forms with which the tax table should have the main aims that the total amount of revenues are coming from all economic categories of social reality (taxable objects) possible, but, yes, well-harmonized among them.
What is the content of the matching principle of taxation?
The tax structure must be configured so that the combination of selected tax forms constitutes a homogeneous whole in terms of objectives, thus avoiding the occurrence of overlaps and gaps in the taxation, i.e., taxing economic capabilities more than once and others never, referred to as taxable objects.
What is the content of the principle of sufficient continuity?
The provisions in the tax laws should reasonably persist over time, i.e., they must not undergo changes after large intervals of time and, as far as possible, should be inserted under general tax reforms.
What is the content of the principle of sufficient transparency?
The tax character standards must be developed so as to minimize any concerns of taxpayers and administrators regarding the performance of their respective rights and obligations, avoiding any kind of arbitrary, interpretive liberties and difficulties in calculating the different magnitudes that encrypt the different tax levies.
What are the different criteria/customarily incidental to those used to distinguish between taxes on the same computer?
As its very name indicates, differentiation between regular and occasional taxes is established on the basis of whether the taxable event is recurring or, however, occasional.
Item 5: Tax Equity
Meaning of tax equity.
The two criteria that theorists have been handling in tax matters since the time of the first formulations of the classical economists are the Benefit Principle, also called the Equivalence Principle, and the Principle of Ability to Pay.
What is the formula that satisfies the principle of benefit?
The Benefit Principle, also called the Equivalence Principle, proclaims that a tax system is fair only to the extent that each individual contributes to the financing of public activities according to the interest (benefit) they have in such activities.
Meaning of “equality of sacrifice” in the principle of capacity to pay.
In the early years of the 20th century, Edgeworth and Cohen Stuart, each on their own, tried to give operational content to the equality of sacrifice, establishing three meanings for it: equal absolute sacrifice, equal proportional sacrifice, and equal marginal sacrifice.
The concept of tax incidence.
Ultimately, what it is about is considering the changes experienced in real income and relative prices of the system, as the ultimate consequences of a long and complex chain of economic effects that the tax change itself triggers.
Tax incidence: Legal incidence and impact.
Legal incidence, also called formal incidence or impact, is the first stage of the chain of reactions that the imposition of the tax starts. Therefore, it can only be said that its study lacks any interest from an economic perspective, except, of course, in the very short term, as it refers to those effects caused to those whom the tax regulation defines as taxable or liable for it.
Classes of tax incidence: Absolute and differential incidence.
The absolute incidence of a tax, also known as specific incidence, attempts to measure changes in the distribution of real income caused by it, assuming that there is consistency or absolute inalteration in other budgetary variables. Despite its obvious simplicity, it is not the most appropriate measure of incidence because, by definition, it turns its back on the tax changes in other budgetary variables that, in turn, impact on any type of income distribution considered.
Classes of tax incidence: Balanced budget incidence.
The balanced budget incidence attempts to measure changes in income distribution caused by the budget, taking it as a whole and not divisible. In this case, what is considered is the effect of a tax change that is accompanied by a change in government spending in the opposite direction so that the budget continues to maintain the same balance.
Classes of tax incidence: Functional impact.
This is the perspective from which to study the redistributive effects of tax changes as they relate to the different components of income (wages, profits, interest, etc.).
Setting of tax translation.
This tends to make it clear that the tax burden at the end of the process is shared (redistributed) among the intervening agents differently from how the design of the tax expected it to be shared (e.g., supported in full by the final consumer).
The Law of Dalton.
It establishes that the burden of a tax on goods is divided between buyers and sellers in the ratio between the elasticities of supply and demand of the asset. Only in extreme cases of infinite or zero elasticities of supply or demand is when the incidence is placed 100% on one of the two sides of the market.
Item 6: Personal Income Tax (PIT)
Characteristics of the Personal Income Tax.
Its salient features are: It is a direct tax, levied on net income, and it is personal, general, subjective, and recurrent.
List the income that the IRS taxes following the criterion of the source generator.
Upon advice of its source or origin, the following should be included: personal employment income from paid employment; income derived from the various capital items (movable and immovable property) owned by the individual; personal employment income from self-employment or income from business activities and professionals developed by the subject (which is a mixed income of labor and capital); and, finally, positive or negative changes experienced in the estate of the subject throughout the period.
Definition of irregular income.
Irregular income is income for which it would be impossible to know with absolute certainty what its exact amount was. For obvious reasons, different tax structures do not respect this criterion but opt for the accrual at the time of generation and collection of income, maintaining that it implicitly flows to the individual as a more or less regular flow over time. The period is usually made to coincide with the calendar year.
Meaning of capital gain.
Capital gains are understood as variations, positive or negative, experienced by the value of the taxpayer’s assets during the tax period. They are calculated by the difference between the value of the asset at disposal or realization, be it potential or actual, and its acquisition value.
Characteristics and types of capital gains.
Its main features:
- They occur irregularly in time, besides lacking any kind of predictability.
- In any case, they involve alterations of ability to pay, which may be positive (capacity building) or negative (loss of capacity).
- They are always a source of assets.
- They are not bound in any case to activities normally carried out by the individual.
As for the kinds of capital gains that can be considered, it is true that there is no single approach to classifying them, but many. It is possible to distinguish, according to their effectiveness, between:
- Realized capital gains, which are actually produced as a result of the disposition or execution of any assets owned by the individual, such as the derivative of the sale of a property, for example.
- Unrealized gains or potential gains, which are those that would take place only if such a transfer were to occur.
Or, given the nature of the gain or loss itself, the following three classes:
- Those that occur as a result of falling interest rates.
- Currency gains, which originate in widespread increases in the price level.
- Pure gains, which are those whose origin is not in either of the two phenomena reviewed.
Differences between irregular income and capital gains.
Capital gains are understood as the positive or negative changes experienced by the value of the taxpayer’s assets during the tax period and, accordingly, are estimated by the difference between the value of the disposal or realization of assets and their acquisition. It is, therefore, irregular income (non-authorized returns) that revolves around the concept of accumulation.
Taxable income in income tax following the criteria of personality.
What is taxable is the income earned by individuals resident in that territory. Two substantially different “incomes” are evident: in the first case, the taxable income would reach the “national income” of the subject, irrespective of their country of residence; in the second case, the tax is levied on the “world income” of residents in the country, regardless of where it occurs.
Classes of tax treatment of capital gains.
- Full inclusion for all purposes in the tax. Such a solution requires absolute respect for the principle of capacity to pay and full consistency with the extended concept of income.
- Establishing a special tax on them. This course would provide more adequate treatment, more specific to such demonstrations of ability to pay.
- Inclusion in income tax with differential treatment. Such treatment involves not taxing the tax base exclusively for this type of income at a fixed rate of tax, different from that applied to the base composed of other income received by the taxpayer.
What is the difference between income and performance?
The meaning of performance is the product or utility (paid) by a thing in relation to what it consumes or costs, while income is the term used to designate the entry of a certain amount of something into someone’s possession. The nexus that, at the same time, differentiates them is the expense, which is understood as using or consuming something that is inevitably lost, disappears, or is destroyed by using it.
What is the assignment of rents?
According to this criterion, one would have to count the income actually received by the individual or returns made; the alleged income, which are those that the law deems obtained by the subject; imputed rents, which are those attributed to the subject depending on their nature, origin, or destination, for all that the same may well be that not having received them effectively; and finally, the dummy or unrealized revenues, which are attributed to the subject even when the latter, effectively at least, has not obtained them.
Item 7: Income Tax
Statement of the defining characteristics of the Income Tax.
The income tax of legal persons, also called “company tax,” is a direct tax of a personal and general nature as regards its purpose, which taxes income regularly received by certain legal persons—usually, but not limited to, capital companies and other entities that tax legislation deems taxable persons.
How far can one say that corporate tax is a general tax?
Corporate income tax aspires to be general, both as regards its object and as taxable persons, though the latter sense of the generality of the charge is at least very debatable, because of the requirements and conditions usually imposed by tax regulations on taxable persons.
Why has it been agreed to consider corporate income tax as a personal tax?
It is a tax that is personal in nature since it requires taking into account the economic capacity of the (legal) persons, which manifests itself in the existence of accounting-tax profit or net income for the year.
What is meant by profit from a strictly economic perspective?
From a purely economic perspective, profit means the difference between the value of output produced over a given period and the cost of all factors applied to their procurement, on the understanding that such values—the output and inputs—are always freely determined in the market.
What is meant by profit from an accounting-tax perspective?
Accounting profit is the residual income to shareholders of the company, and its calculation is obtained mainly from prices and costs of the output of the period and the application of accounting valuation criteria, which are based on the technical principle of historical or acquisition price.
What is the fundamental difference between economic profit and accounting-tax profit?
From an economic perspective, profit is the difference between the value of output produced over a given period and the cost of all factors applied to its collection. Accounting profit is the residual income to the shareholder, and its calculation is obtained from the prices and costs of the output of the period and the application of accounting valuation criteria, which are based on the technical principle of historical or acquisition price.
What is the argument of double taxation, historically argued against this tax?
That the agreement on the same tax imposed two personal taxes on income (Income Tax and Corporate Income Tax), which results in a very particular type of income (profits distributed by companies) being doubly taxed, thus producing a discriminatory tax treatment of one class of income that is not at all justified.
Set out the criteria under which the subject can be set to taxation in the Tax.
The subject may be set according to a subjective criterion, which leads to the taxable companies with recognized legal personality apart from any other consideration, or, alternatively, in response to an objective criterion. This leads to considering the person liable to tax any entity carrying on a business, regardless of whether it is incorporated or not.
What does it mean to set the entities subject to corporation tax according to subjective criteria?
It gives rise to two major drawbacks:
- It excludes from the taxable category associative forms of relatively recent creation that, due to their agility and effectiveness in management, are widely used today.
- It provides an excuse for those liable for this tax to, in a clearly abusive manner, find accommodation for the development of their activities in such associations without legal personality, which are provided by law to serve very different purposes than strictly for-profit ones.
What does it mean to set the entities subject to corporation tax according to objective criteria?
It involves unjustified discrimination in tax treatment because the income of an individual or family from an economic activity would be taxed by a progressive tax (PIT), while those from the same activities, only if their owners are entities subject to this tax, would be subject to a proportional levy.
Integration of personal taxes on income. Setting out the systems of total integration of the two taxes.
The simultaneity of two personal income taxes in the same system leads to a kind of income being doubly taxed. A distinction is made between total integration systems and partial integration systems. Within the systems of full integration, we have: the unit system, the system of partnerships, and the fiscal transparency system.
Explain what the system of full integration of personal taxes on income known as the unit tax system is.
It involves the complete disappearance of Corporate Income Tax because what it does is integrate the partner’s share into the base of their income tax, deferring tax on the undistributed profit until the shareholder disposes of their shares in the company and obtains the corresponding capital gain (or loss).
Explain briefly what the system of partial integration of personal taxes with the Corporate Income Tax operating system known as deduction of dividends is.
These systems do not seek the removal of any personal income tax but aim to limit or eliminate double taxation of distributed profits. There are two ways to do this: operating within the Corporate Income Tax or within the Personal Income Tax.
Explain briefly what the system of partial integration of personal taxes with the Corporate Income Tax operating with an exemption known as the dividend is.
It is the simplest system. The profit of the entity is taxed in its entirety by the Corporate Income Tax, setting the regulatory standard of the Personal Income Tax to provide total exemption for dividends and other forms of remuneration to shares in the companies’ own capital.
What is understood in the area of corporate tax as linked operations?
It covers the operations that a partner or their closest relatives have with a company in which they are a participant, as well as those that take place between two or more entities within the same group of companies.
What is meant by transfer price?
It is the price that takes place between different units within the same group of companies, especially when these occur in the context of international economic relations.
Item 8: Property Taxation
Define by characterizing the Tax Equity.
It’s personal, comprehensive and regular gravel tenure heritage and reside with the net value thereof. Most often it is embedded within the taxation system as a supplementary income tax.
2 .- Define by characterizing the tax estate. Real tax burden on the occasion of his heritage inheritance and reside with the net value of all of it.
3 .- Define by characterizing the Tax Free Acquisitions. Personal tax levied occasionally the net value of all assets are acquired by inheritance or donation.
4 .- Define by characterizing the Property Transfer Tax. Real tax burden on a gross value of certain assets and liabilities in connection with its transmission onerous.
5 .- Define by characterizing the Property Tax. Real tax levied periodically and partially (usually only real estate assets of nature) the gross value of assets owned.
6 .- Define by characterizing the tax increases in value. Real nature tax, levied occasionally experienced a net increase of certain assets and liabilities.
7 .- Define by characterization of the Capital Cam. Personal tax levied occasionally the net value of all assets are owned in any case not be complementary to the income tax.
8 .- What is meant by human capital? Is defined as the value of qualifications or professional skills and capacity for physical and intellectual development of the work that the individual has acquired, can be estimated through a simple update future income for the subject work.
9 .- set out criteria for assessment, alternatively at market value, it
used to quantify the tax base Tax Equity.
It uses criteria such as book value, the acquisition cost, its replacement cost, yield capitalization actively generated by the asset, or even the subjective value. In general, all these solutions offer the greatest advantage to the tax authorities is that they are valued according to the price of input or cost.
10 .- State the tax forms that may refer to the Tax
Property Transfer Profit are two variants:
The tax on inherited wealth or mass relic: it is a charge of actual character turns on the net present value of total assets transmitting connection with the death of its proprietor and absolute independence of the cast that it is between their heirs.
The tax on inherited portion or gut or legacies: gravel personally the value of which corresponds to each of the estate total.
13 .- Why is recognized tax lots as more equitable than the
Relict flow burden on because if it is the personal tax on inherited portion, you will usually be progressive, also graduating escalation not only in terms of the amount but also by the degree of kinship.
14 .- Why is said to equal hereditary estate, is best for the
tax administration a tax on the relict flow tax
portions hereditary? taxes levied relict flow net present value of total assets is transmitted, regardless of the distribution of it is made, it is therefore a real tribute of nature that exploits the opportunity offered by the transmission the estate of a person to his heirs for taxing all of his personal wealth, making it responsible for the latter depending on the part corresponding to each one of such estate. For its part the tax levied on personal and hereditary portions progressively the value of what each rightful heir of the estate total.
15 .- Why is stated that the establishment of a tax on portions
hereditary rather than one on the Relict flow generally improves fairness of
system? Because the tax on portions promotes dispersal of assets because the tax will always be smaller the smaller the portion that is inherited, so that the fairness of the system as a whole should benefit.
16 .- What that usually forms the basis of transfer duty
onerous property? The basis is given by the exchange value or market value of the order of transmission elements, and this is applied, a fixed tax rate.
17 .- What is what is usually onerous burden on the ITP? A tax on consumption through taxation proprietary transactions in commercial, civil traffic operations must also have a corresponding tax levy.
18 .- It sets out the disadvantages attributed to the registers as instruments of
tax management. One of its weaknesses is its management, is not simple, whose preparation is very expensive, also because of the decentralization of the tax, its implementation is not uniform throughout the national territory, which can cause both relocations resident and companies and from the equity, from where it receives more criticism
19 .- It sets out the positive aspects that are often attributed to property tax
Property. There is a tax management is not too expensive, checking their tax bases is quite simple. Let your potential tax collection is quite high and that it is a reasonably fair assessment.
20 .- What is the most striking feature of the levy of capital, whereby
precisely in many countries, the Constitution makes it impracticable? This is a tax that has no effect on the economic behavior of social agents not applied continuously. I gradually raised the tax burden it entails, can force the sale of part of the assets owned by constribuyentes what will undoubtedly lead to severe drop in the price of many assets and liabilities and cause an untenable situation for many of these, only bearable if The country has an agile and robust financial system.
ITEM 9 THE CONSUMPTION TAXATION
1 .- Advantages attributed to consumption taxation. Great revenue capacity and cost management.
2 .- Disadvantages attributed to consumption taxation. Inequity and distorting effects on market prices.
3 .- scenario the taxation of consumption taxation. There are two types of tax: what are aimed at the general consumer (called tax sales or turnover) and those which affect only certain consumption (called excise taxes or excise duties)
4 .- Methods of taxing consumption. It can be done two ways: Directly, paying tribute to all individuals for goods and services purchased for consumption (personal tax on spending). And indirectly, by applying the tax to one or more phases that have to pass good, so that its charge to join the value of output at that stage and will be dragged to the table, within the indirect, are , monophasic taxes on sales, sales taxes or plurifásicos cascade and value added tax (VAT).
5 .- Methods of taxes on certain inputs. There, foreign trade taxes, also known as rent Customs (Tariffs), which can not be considered as such in pure consumption tax, levied on import as well (and sometimes export) to come from consumption of capital goods. And The excise taxes, also called excise and also that unlike excise taxes on foreign trade, these should be considered if that consumption taxes for all purposes.
6 .- Advantages of monophasic taxes on retailers regarding a tax
plurifásico. Monophasic, taxed only once, or at one point the production process and distribution of goods and services, shifting the tax burden further toward the consumer, linking the successive price to get there. And plurifásicos borne every stage of production and distribution process from the first MP to the transformation of retail.
7 .- Effect Concept Piramidación. It is that by taxing the sales of tax-phase of the phases of the production process and overlay the tribute to the market price of its output, the entrepreneurs of the next phase is not encrypted and their profit margin on their total costs only, but in such increased costs imposed on its suppliers to have an impact, bringing the value of output in the market is going to accretion, in addition to the tax that has been dragging on the stage above, by the difference in the profit margin dragged the tax has caused.
8 .- What is the destination principle in indirect taxation? Argue that it is in the country where the goods are consumed internationally traded where they have to apply these charges, is a cheapening of the exports that allows foreign producers compete with companies in the importing country on equal terms.
9 .- What is the origin principle in indirect taxation? This principle holds that these taxes should be applied in the country where goods are produced. In the imposition of sales, when these affect international transactions, provides a significant advantage to those who are more productive in real terms or a lower tax burden on their business.
10 .- What is the full exemption for VAT? It’s the employer that made no impact of VAT, yet also has the right to deduct the VAT that he had an impact on supplies and services necessary to produce good whose supply has been classified fully exempt.
11 .- What is the limited exemption for VAT? (exempt transaction), that transaction is subject to tax because it is itself a supply of process of producing goods or consumer services, which, however, the rule governing the tax provides that the employer who does it not charge VAT to his customer. But it is also, as the employer does not charge VAT on the price of delivery, tax law, when the tax settlement for that transaction, you can not deduct the VAT that he had an impact on inputs with embedded delivery what tax-exempt
12 .- Why are apportioned in VAT? With the implementation of the proportion, the taxpayer will only deducting the VAT incurred on purchases on the percentage of transactions that are incurred in the deductible on the total made.
13 .- Specific Purposes is the imposition of taxes. There are four:
Impact on the demand of luxury goods with intent to markedly contribute to the achievement of the purpose of redistribution.
Being an instrument of allocative actions in case of needs undesirable for it by taxing consumption is harmful goods.
Collaborate with the reasoning of certain consumer goods in cases of shortage of supply.
Getting resources to finance specific public activities (income tax affected).
14 .- What is a tax affected?
15 .- Characteristics to have to have the goods that are subject to taxes
selective consumption in order to meet revenue collection. four.
This is indirect taxes, it is taxed as indirect demonstration of ability to contribute, and are likely to impact through the price –
Taxes are real, since demonstrations are based on ability related to goods or property determining its levy in which there is no direct link with any person, except their own consumption.
As this is not personal taxes, but real, in its structure can not include elements designed to subjectivizing its load. We face a tax of an objective nature.
It is instant tax or occasionally, compared with periodic accrual. Of course this feature is derived from the indirect nature of these taxes.
16 .- Concept of proportion in the VAT tax legal regulation stipulates that what is known as the pro rata rule, taxpayers may only be deducted input VAT on purchases in the percentage by which the operations are giving rise to the right to deduct the total of those performed.
ITEM 10 other public revenues.
1 .- What kinds of taxes exist? Taxes, fees and special levies.
2 .- List the attributes of a contractual nature. Taxes, fees and special levies.
3 .- Concept of rate. It is a coercive government income tax or tribute which is done individually using a private or public domain, and the provision of public services which they relate, directly affect or benefit the taxpayer and subject liabilities of the masses, giving the fact that such services are, more often at least, of soliciting or receiving compulsory for anyone who satisfies them.
4 .- The concept of special contribution. Taxes are relatively newly defined as “coercive levy collected in proportion to the benefits and increased property value experienced by the property as a result of works or public improvements undertaken in the public interest.
5 .- Differences between tax and special contribution. The previous two.
6 .- Differences between tax and special contribution. In the tax no direct consideration of the public sector, and are characterized by being coercive. And the special contribution, if there is constraprestación “coercive levy collected in proportion to the benefits and increased property value experienced by the property as a result of works or public improvements undertaken in the public interest.
7 .- Differences between rate and tax. No tax direct consideration of the public sector, and are characterized by being coercive. And the rate, is a coercive government revenue or tribute which the chargeable event is to use a particular title or deprived of a public domain, and the provision of public services which they relate, directly affect or benefit the taxpayer and the taxpayer masses, giving the fact that such services are, more often at least, of soliciting or receiving compulsory for anyone who satisfies them.
8 .- Differences between tax and public money.
8 .- Concept of Public Debt. Unilateral contract and public law, by which one party delivers to the State or another public body a certain amount of money, committing it to satisfy a periodic interest and eventual repayment of principal, if that under the stipulated conditions of the loan is returned.
9 .- Explain the expression “debt has been issued over par. Occurs when the issue price (Pe) is larger than the nominal value (Vn).
10 .- Value of parity of a government bond. It is the result value of capitalizing the interest of the debt issued under par at the rate in force at the market.
11 .- Conditions for carrying out the conversion of a public debt issue. There are two conditions to be met for the State to proceed with a conversion of the outstanding debt: 1.de legal nature: is that the debt is convertible, which is resolved in the terms of issue and subscription, which is where such a possibility explicit. 2. In economic: is that the market interest rate has fallen below due on the debt issue which is to be converted.
12 .- What is debt consolidation? What the state does is to maintain its debt position and formally meet their obligations. For what it does is, when next the maturity of an issue, to launch another that he can meet the repayment of the former without having to go to an exacerbation of the charge, saying then that the State to the consolidation of the floating debt.
13 .- What is the difference between consolidation and conversion of public debt? Through debt consolidation what the state does is to maintain its debt position and simultaneously formally meet their obligations. For what it does is, when next the maturity of an issue, to launch another that he can meet the repayment of the former without having to go to an exacerbation of the charge, saying then that the State to the consolidation of the floating debt.
14 .- Classes of public debt repayment. Amortization 1.la strictly (at one time, gradually). 2. Inflation, and 3. The repudiation.