Chapter 1 An introduction to Taxation
Chapter 1 An Introduction to Taxation
Learning objectives Discuss the history of taxation Differentiate between three types of tax rate structures Describe the various types of taxes o Discuss what constitutes a good tax structure o Describe the tax entities in the federal income tax system
Learning Objectives • Discuss the history of taxation • Differentiate between three types of tax rate structures • Describe the various types of taxes • Discuss what constitutes a “good” tax structure •Describe the tax entities in the federal income tax system
Learning objectives Identify the various tax law sources and understand their implications for tax practice Describe the legislative process for the enactment of the tax law Describe administrative procedures under the tax law Describe the components of a tax practice and understand importance of research process and computer applications in taxation
Learning Objectives • Identify the various tax law sources and understand their implications for tax practice • Describe the legislative process for the enactment of the tax law • Describe administrative procedures under the tax law • Describe the components of a tax practice and understand importance of research process and computer applications in taxation
History Of Taxation In The United states First Federal Income tax in 1861 ● Reinstated in 1894
History Of Taxation In The United States • First Federal Income Tax in 1861 • Reinstated in 1894
History Of Taxation In The United states ·ln1895,the Supreme Court Ruled Unconstitutional March 11913 the sixteenth Amendment ● Revenue Acts From 1913 to Present
History Of Taxation In The United States • In 1895, the Supreme Court Ruled Unconstitutional • March 1, 1913, the Sixteenth Amendment • Revenue Acts From 1913 to Present
The Constitution of The United states The Congress shall Have Power to Lay and collect Taxes on Incomes from whatever source Derived, Without Apportionment Among Several States, and Without regard to Any census or Enumeration
Sixteenth Amendment To The Constitution Of The United States • The Congress Shall Have Power to Lay and Collect Taxes on Incomes, From Whatever Source Derived, Without Apportionment Among Several States, and Without Regard to Any Census or Enumeration
Manner n which tax law s Changed Or Modified Federal income tax is changed Onai incremental basis rather than a complete evsi The tax law has been referred to asa“ quilt work of tax law
Manner In Which Tax Law Is Changed Or Modified • Federal income tax is changed on an incremental basis rather than a complete revision. • The tax law has been referred to as a “quilt work” of tax law
Revenue sources 口 Individual 50% 口F|CA u Corpora 口 Other 20% 1965 1975 1988 1999
Revenue Sources 0% 10% 20% 30% 40% 50% 60% 1965 1975 1988 1999 Individual FICA Corporate Other
Two Basic Parts f ax Structure Tax Base The amount to which the tax rate is applied to determine tax due. For example, an individuals tax base for the federal income is his or her taxable income tax base for property tax is generally the fair market value of property subject to tax. Tax Rate Is merely the percentage rate applied to the tax base
Two Basic Parts Of Tax Structure • Tax Base – The amount to which the tax rate is applied to determine tax due. • For example, an individual’s tax base for the federal income is his or her taxable income. • tax base for property tax is generally the fair market value of property subject to tax. • Tax Rate – Is merely the percentage rate applied to the tax base
Rate structures Can Be Progressive e Regressive Proportional or Flat Tax
Rate Structures Can Be….. • Progressive • Regressive • Proportional Or Flat Tax
