Discussion Questions
1. Define taxation.
taxation is the practice of collecting taxes (money) from citizens based on their
earnings and property. The main purpose of taxation is to raise revenue for the
services and income supports the community needs.
Examples (fund police and courts, have a military, build and maintain roads)
Taxation is also a mode of allocating government costs or burden to the people.
2. Distinguish the theory and the basis of taxation.
Theory of taxation answers the question why, why there’s a tax?
Lifeblood doctrine – life ng government
Necessity theory
3. What are the theories of government tax allocation? Explain each.
Benefit received theory – presupposes that the more benefit one receives
from the government, the more taxes he should pay.
Ability to pay theory – presupposes that taxation should also consider the
taxpayers ability to pay. Taxpayers should be required to contribute
based on their relative capacity to sacrifice for the support of the
government
4. Differentiate vertical and horizontal equity.
Vertical equity proposes that the extent of one’s ability to pay is directly
proportional to the level of his tax base.
Example: A has 200, 000 income while B has 400 000. In taxing income,
the government should tax B more than A because B has greater income;
hence, a greater capacity to contribute
While
Horizontal equity requires consideration of the particular circumstances
of the taxpayers.
Example: For example, both A and B has 300 000 income, A is single
without a child while B is married with four children. In taxing income, the
government should tax A more than B because A has greater capacity to
contribute considering the support requirements of his dependents.
Vertical equity is a gross concept while horizontal equity is a net concept.
Vertical equity is a method of collecting income tax in which the taxes paid increase
with the amount of earned income. The driving principle behind vertical equity is that
those who have the ability to pay more taxes should contribute more than those who are
not.
While
Horizontal equity is an economic theory that states that individuals with
similar income and assets should pay the same amount in taxes.
Horizontal equity should apply to individuals considered equal regardless
of the tax system in place. The more neutral a tax system is the more
horizontally equitable it is considered to be.
5. Discuss the lifeblood doctrine.
Taxes are the lifeblood of the nation. Without revenue raised from
taxation, the government will not survive, resulting in detriment to
society. Without taxes, the government would be paralyzed for lack of
motive power to activate and operate it.
6. Enumerate and explain the inherent powers of the State.
Police power – the power of the State to enact laws in relation to
persons and property so as to promote public health, public
moral, public safety and general welfare of the people.
Power of eminent domain – the power of the State or those to
whom the power has been delegated to take private property for
public use upon paying the owner a just compensation to be
ascertained according to law.
Power of taxation – the power of the State by which the sovereign
raises revenue to defray the necessary expenses of the government.
7. Distinguish the three powers of the state and enumerate their similarities.
8. Describe the scope of the power of taxation.
9. Distinguish substantive due process from procedural due process.
[Link] the concept of equality from the concept of uniformity in
taxation.
[Link] non payment of debt versus non payment of tax in terms of
consequences.
[Link] institutions are exempt from real property tax in the constitution.
[Link] of the constitutional limitations are also classified as inherent
limitations?
[Link] the stages of the exercises of taxation power.
[Link] the concept of situs.
[Link] the Marshall doctrine from the Holme’s doctrine.
[Link] the doctrine of strict construction of tax laws.
[Link] double taxation, its elements, and its type.
[Link] are the categories of escape from taxation? Enumerate and explain
each means of escape under each category.
[Link] tax amnesty from tax condonation.
Exercise Drills
C – relates to constitutional limitation
I – relates to Inherent limitation
N – relates to not a limitation to the taxing power
1. Non – assignment of taxes.
2. Territoriality of taxation.
3. Taxes must be for public use.
4. Exemption of the property of religious institutions from income tax.
5. Exemption of the revenues and assets of non-profit, non-stock
educational institutions.
6. Non-delegation of the taxing power.
7. Non-appropriation for religious purposes.
8. The requirement of absolute majority in the passage of the tax exemption
law.
9. Non-imprisonment for non-payment of tax or debt.
[Link] under the same circumstances should be treated equal both in
terms of privileges and obligations.
[Link] from the property taxes of religious, educational, and
charitable entities.
[Link] income and properties are not objects of taxation.
[Link] local government shall have the power to create its own sources of
revenue.
[Link] in taxation.
[Link]-impairment of obligations and contracts.
[Link] of proportional system of taxation.
[Link] courtesy.
[Link] impairment of the jurisdiction of the supreme court to review tax
cases.
[Link] government is not subject to estoppel.
[Link] for non-payment of poll tax.
True or False
1. Eminent domain involves confiscation of prohibited commodities to
protect the well-being of the people
2. Horizontal equity requires consideration of the circumstances of the tax
payer
3. Taxes are the lifeblood of the government
4. Taxation is the mode of apportionment of the government costs to the
people.
5. There should be direct receipt of benefit before one could be compelled
to pay taxes
6. The exercise of taxation power requires Constitutional grant
7. Taxation is inherent in sovereignty
8. Police power is the most superior power of the government. Its exercise
needs to be sanctioned by the constitution.
9. All inherent powers presuppose an equivalent form of compensation.
[Link] reciprocal duty of support between the government and the people
underscores the basis of taxation.
True or False
1. The constitutional exemption of religious, charitable, and non-profit
cemeteries churches and mosques refers to income tax and real property
tax.
2. Taxpayers under the same circumstances should be taxed differently
3. Taxation is subject to inherent and constitutional limitations.
4. International comity connotes courtesy between nations.
5. Collection of taxes in the absence of a law is violate of the constitutional
requirement due process.
6. The scope of taxation is regarded as comprehensive, plenary, unlimited,
and supreme.
7. No one shall be imprisoned for non-payment of tax.
