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Chapter 1: Taxation Principles and Theory

Chapter 1: Taxation Principles and Theory

pp. 2-32

Authors

, Monash University, Victoria
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Extract

Taxation is an ancient and ubiquitous concept that forms one of the central pillars around which civilisation has been built. Taxation plays a critical role in society and has the capacity to affect the lives of everyone within it. History vividly highlights that, while taxation has brought great prosperity to nations, it has also fuelled bitter conflicts. Taxation can invoke passionate emotions in people about their rights and obligations and is a topic on which rational people often have diametrically opposed views. Ultimately, taxation is a powerful instrument that governments use to fund their activities and shape their economies. Without it, they would not be able to survive. While the features of taxation have evolved considerably over the years, taxation remains a fundamental characteristic of the modern nation state and an integral part of the overarching architecture that lies behind the economic systems of every developed country in the world. Its inescapable and pervasive nature was recognised long ago by Benjamin Franklin, who famously wrote: ‘In this world nothing can be said to be certain but death and taxes’.

Keywords

  • Taxation law
  • Functions of taxation
  • Australia’s tax system
  • Tax expenditures
  • Structural features of taxes
  • tax principles
  • Features of a good tax system
  • Sovereign right to tax
  • The tax unit
  • tax theory

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