In: Finance
Provide 2 paragraphs to answer the following question.
2. What is tax equity and tax efficiency? How and why should these concepts be considered when a tax levy is considered?
Taxation equity is that the principle that taxes should be fair. However, there are several criteria for determining what's fair. the advantages principle states that individuals should pay taxes supported the advantages that they receive from government services. for example, excise taxes on gasoline are accustomed build roads and bridges. However, taxes on income and investments are supported the power to pay.
Tax efficiency minimizes the value of complying with the tax code
by reducing its administrative burden and by minimizing any
distortions within the economy caused by the tax. Reducing the
executive burden not only benefits the taxpayers but also the
economy since collecting isn't an objective of program, but simply
a requirement. Although tax accountants and lawyers help people to
adjust to the tax code and reduce their taxes, their work has no
true economic worth since the necessity for his or her help can be
eliminated by simplifying the tax code and facilitating the filing
of taxes, especially through electronic filing.