西方财政学论文

THE EQUITY ISSUES ABOUT TAXATION

The primary revenue source for government is taxes. Taxes are the price we pay for a society which used to fund the activities of government. Some citizens are complained that the taxes are too high relative in return. Taxes are the vital source of revenue. Are the taxes really high? Which confused the economists are figuring out how to design a revenue system that is both efficient and equitable.

Adam Smith argued that equity should be more important when designing and reforming tax systems. The mean of taxes are make the gap between the rich and the poor smaller. But the consequence is on the contrary. It takes a much higher percentage of income from the poor and the rich. Efforts to redistribute the burden, whether in the interests of greater equity or in response to lobbying by particular interests, are the source of much of the complexity in the tax system, especially the income tax.

Criterion, which is the common used for tax fairness is called ability to pay. That is to say, the people who have more earnings should make a larger contribution to the government's taxes. But how do we know which people have more earnings? Firstly, the measure is income, those who get more income form their job would pay more to the cost of government and public services. Secondly, the measure is spending and thirdly, it is assets or property owned. Some of these measures of ability to pay are

more accessible to the tax collector than others. Spending is the easiest tool to measure because it involves transactions in the marketplace that can be tapped at the point of sale. As for income, it is not so easy as spending. The part of income—wage and salary is easy to track through payroll records, but other parts of income—interest, profits and self-employment earnings are much harder to uncover. Assets are the most challenging tax base of all. The property people owned are not easy to track and just focus on certain kind of property, most commonly as real estate and automobiles.

A second principle of taxation is the benefit principle. Different from ability to pay, this one links the tax obligation to the value of the services received in exchange. The state's social, legal, and economic framework makes it possible to earn and keep one's income, and the value of those services can be assumed to be proportional to that income. The same argument has been made for the property tax as a benefit tax. Most local services are fairly directly related to property. In general, however, the benefit principle is invoked for some highly specialized taxes where a clear relationship exists between the user of the taxed good or service and the user of the public service that the tax is used to finance. More recently, the benefit principle has been expressed in the increased use of fees and charges for government services ranging from marriage licenses to health clinics to libraries to public parks. The fee does not cover the full cost of

the service, but it does shift more of the burden of paying for the service to users rather than taxpayers in the general.

If taxes are perceived as unfair, there will be constant pressure to adjust the mix, and each adjustment of the mix changes the distribution of the tax burden and sparks further protests. Both the income tax and the property tax have been subjected to such serial complaints and redistribution of the burden in recent decades. Homeowners have protested their property tax burdens in many states, persuading legislators to shift the burden to industrial, commercial, rental, and personal property.

Although designing tax system for equity is a highly normative issue, there are some positive ways of at least measuring the impact of alternative tax structures on different groups. The central equity issue is almost always framed as one of tax burdens to income. Once the distribution of the tax burden for alternative tax systems is clearly understood, a tax structure can be developed that represents some consensus about how the tax burden should be distribute across income classes. Within the context of that tax system, the narrow issues of equity like the one just posed can be addressed as a matter of fine-tuning the tax system.

The theoretical issues in tax design can be classed as issues of efficiency and issues of equity. Equity in tax design involves both

horizontal and vertical equity, both of which are difficult to define or measure. Equity in a tax system is based on two principle, ability to pay and the benefit principle. The ability to pay criterion favors a proportional tax over either regressive or progressive taxes, which take smaller and smaller or lager and lager shares of one's income as income rises. However, a system with multiple revenue sources can and probably will include a mixture of regressive, proportional, and progressive taxes. The important measure is the equity of the revenue structure rather than a particular tax or fee.