Chapter
1
Types of Taxes and the
Jurisdictions that Use Them
Welcome to the course
As you are aware, having accessed this
powerpoint presentation, the slides/lecture
comments for this course will be accessible through
my web page.
Everything else will be accessed through
Blackboard.
Course grades will be based on homework and 3
exams—each weighted at 25%.
As in 5301, I will host weekly conference calls
(beginning next week) to discuss issues, answer
questions, etc.
Definitions
Tax = payment to support government
contrast with fine/penalty or user fee
Taxpayer = person or organization that pays tax
(includes individuals and corporations)
Incidence refers to ultimate economic burden of a
tax.
may not be person who pays tax
Jurisdiction is the right of a government to tax.
Tax formula
Tax revenue = rate x base
Rate can be flat or graduated (usually progressive)
Base may change in response to changes in rate
Supply Side Economics Discussion
Supply Side Economics – predicated on lowering tax
base and corresponding increase in tax rate.
Stimulate increases in disposable income, GDP,
consumption , consumer confidence, decrease
unemployment…Does it work?
Jurisdiction
Taxpayers are often subject to multiple tax
jurisdictions
Local (city, county)
State
Federal
Foreign tax authority
Conflicts are usually minimized by allowing either:
A deduction from the tax base against which the
jurisdiction with the secondary claim assesses tax, or
A credit against the tax imposed by the jurisdiction with a
secondary claim