Sunday, September 8, 2019
Adam Smith & UK Income Taxation Essay Example | Topics and Well Written Essays - 4500 words
Adam Smith & UK Income Taxation - Essay Example 42). According to Smith, the first maxim is that ââ¬Å"the subjects of every state ought to contribute toward the support of government, as nearly as possible, in proportion to their respective abilities, that is in proportion to the revenue which they respectively enjoy under the protection of the stateâ⬠(Smith 1784, p. 639). According to Smith, ââ¬Å"observation or neglect of this maxim consists in what is called the equality or inequality of taxationâ⬠(Smith 1786, p. 639). For Smith, the second maxim is that ââ¬Å"the tax which each individual is bound to pay ought to be certain, and not arbitraryâ⬠(1784, p. 639). For Smith, this means that ââ¬Å"the time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other personsâ⬠(1784, p. 639). For Smith, the second maxim is necessary because ââ¬Å"otherwise, every person subject to the tax is put more or less in the power of the tax-gathered, who can either aggravate the tax upon any obnoxious contributor, or extort, by the terror of such aggravation, some present or perquisite to himselfâ⬠(1784, p. 639-640). Smith emphasized that uncertainty of taxation ââ¬Å"encourages insolence and favours the corruption of an order of men who are naturally unpopular, even where they are neither insolent nor corruptâ⬠(1784, p. 640). The third tax maxim of Adam Smith is that ââ¬Å"every tax ought to be levied at the time, or in the manner, in which is it most likely or most likely to be convenient for the contributor to pay itâ⬠(1784, p. 640). Finally, Smithââ¬â¢s fourth maxim on taxes is that ââ¬Å"every tax ought to be contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the stateâ⬠(1784, p. 640). On the fourth maxim, Smith also noted four things. One, the tax levy may require a great number of officers whose salaries may eat the greater portion
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