The Principles of Taxation Taxation systems are centered around two basic ideas. One is that people that benefit from services provided by tax revenues should be the ones who pay for them. Secondly, taxes should be paid in proportion to the number of benefits or services that an individual receives. Three Types of Taxes Taxes can be proportional, progressive, or regressive in nature. A proportional tax is equal in that it sets the same percentage of income taxation on everyone regardless of income. So for individuals, as their income rises or falls, they pay the same percentage in tax. A progressive tax imposes a higher percentage rate of taxation as incomes go up. So as people make more money they pay a higher percentage of that income in tax, and the percentage goes down if their income goes down. Regressive taxes are the opposite of progressive. They impose a higher percentage of taxes on lower incomes than on higher incomes. Often these taxes are not income taxes, but other types of taxes that set a steady rate, but wind up hitting lower-income people harder than higher-income people. For example, if there is a 5% sales tax on goods and services it would be regressive because while it is taxing everyone at the same proportion lower-income individuals will pay a higher percentage of their overall total income than a higher income individual would. What Makes for a Good Tax System This course covers lots of different taxes and tax systems that are used in Zambia. This research paper is your opportunity to apply what you have learned and propose changes to the Zambian tax system. Detail what kind of tax system you would set up for Zambia. What taxes would you get rid of or modify? State what changes you would make and why?
The Principles of
Taxation systems are centered around two basic ideas. One is that people that benefit from services provided by tax revenues should be the ones who pay for them. Secondly, taxes should be paid in proportion to the number of benefits or services that an individual receives.
Three Types of Taxes
Taxes can be proportional, progressive, or regressive in nature.
A proportional tax is equal in that it sets the same percentage of income taxation on everyone regardless of income. So for individuals, as their income rises or falls, they pay the same percentage in tax.
A progressive tax imposes a higher percentage rate of taxation as incomes go up. So as people make more money they pay a higher percentage of that income in tax, and the percentage goes down if their income goes down.
Regressive taxes are the opposite of progressive. They impose a higher percentage of taxes on lower incomes than on higher incomes. Often these taxes are not income taxes, but other types of taxes that set a steady rate, but wind up hitting lower-income people harder than higher-income people. For example, if there is a 5% sales tax on goods and services it would be regressive because while it is taxing everyone at the same proportion lower-income individuals will pay a higher percentage of their overall total income than a higher income individual would.
What Makes for a Good Tax System
This course covers lots of different taxes and tax systems that are used in Zambia. This research paper is your opportunity to apply what you have learned and propose changes to the Zambian tax system. Detail what kind of tax system you would set up for Zambia. What taxes would you get rid of or modify? State what changes you would make and why?
Step by step
Solved in 2 steps
