The benefits received principle of taxation asserts that people and businesses who receive the benefit of a good or service financed by taxes should pay the tax it requires. The ability to pay principle is the opposite of the benefits received principle.Know More
It can be difficult for governments to implement the benefits received principle because of its nature. It is not easy to measure the benefits that certain people receive from a public good. Most governments, however, normally implement taxes in cases where benefits are easily identified.
Charges, fees and taxes are often levied against those who use public universities, gasoline or national parks. Because the specific people who use these government resources receive much of the benefit from their existence, those people are asked to pay for the benefit they received. As an example, gasoline taxes are often used to construct and repair highways. This is because those who buy gasoline are assumed to be the users and the major beneficiaries of roads and highways.
The ability to pay principle is very different from the benefits received principle. The ability to pay principle asserts that the tax burden should be split up according to how able someone is to pay for government services.Learn more about Taxes
Though the law is no longer in place, in the 1700s Russia had a federal tax on people with beards. The motivation for this strange revenue source stemmed from the country's then-ruler, Peter the Great, and his crusade against facial hair.Full Answer >
According to the Internal Revenue Service, how long people should keep their tax records depends on the type and purpose of the documentation, but IRS and Forbes magazine guidelines say that keeping records three to six years from the filing date or due date, whichever is later, covers many eventualities. The IRS recommends keeping tax records at least until the statue of limitations related to a certain record expires.Full Answer >
A dependent tax deduction is an allowance for reduced tax payments on a preset basis for those who have people who rely on them for direct monetary support, according to the Internal Revenue Service. Children and other relatives that meet specific requirements can be claimed as dependents, as can some people with certain disabilities who rely on the taxpayer for support and care.Full Answer >
Energy tax credits are incentives to lower taxes for people who use alternative energy resources. These are authorized by the U.S. Congress. They work by reducing income tax owed by a dollar-for-dollar basis. In contrast, a tax deduction lowers the amount of income subject to tax.Full Answer >