★ Existence of government is a necessity - cannot continue without
A. CONCEPT + CHARACTERISTICS means to pay its expenses therefore has the right to compel State: citizens to contribute (1) Government or Sovereignty ★ Reciprocal duties between state (compensation) and inhabitants (a) Legislative: Senate, House of Representatives (benefits) (b) Executive: President ★ Lawful taxation - public purpose (c) Judiciary: Chief Justice (2) People ★ Inherent in sovereignty (3) Territory ★ Legislative in character (4) Money ★ Subject to constitutional and inherent limitations
Taxation (Tax) Imposition of tax (legislative act) v. collection (administrative)
1. Enforced contribution ○ not voluntary Basic Principles of a sound tax system: ○ Not dependent on the will of the person 1. Fiscal Adequacy: enough money 2. Proportionate 2. Administrative Feasibility: properly administered ○ Based on ability to pay 3. Theoretical Justice: ability to pay 3. Payable in money ○ Pecuniary burden ○ Form of money in legal tender 4. Levied (Impose) on persons / property B. CLASSIFICATIONS + DISTINCTIONS ○ Imposed on acts, transactions, rights or privileges ○ But person is the one who pays 1. As to subject matter or object ○ *not all who pay shoulder burden of the tax a. Personal - fixed amt. for people residing in a specific 5. Levied by the states territory (ex. Community tax) ○ Subject to jurisdiction of the state b. Property - whether real or personal ○ For tax to be enforced c. Excise - performance, privilege, occupation (ex. 6. Levied by law Income tax, VAT, estate tax, donor’s tax) ○ Power to tax of congress + local legislative bodies 2. As to who bears the burden (sometimes executive) a. Direct - taxpayer primarily liable b. Indirect - burden passed on (ex. VAT, customs) 7. Levied for public purpose (benefit) 3. As to determination of amount ○ Provide income for public purposes a. Specific ○ Can’t be used for purely private purposes b. Ad Valorem (acc. to value) ○ People’s benefit + needs of government 4. As to purpose a. General/Fiscal/Revenue C. LIMITATIONS ON THE POWER OF TAXATION b. Special/Regulatory 5. As to scope of authority imposing the tax (1) Constitutional Limitations a. National (a) Due process of law b. Municipal/Local (b) Equal protection of the laws 6. As to graduation or rate (c) Rule of uniformity & equity in taxation a. Proportional(PH) - flat/uniform tax (d) No imprisonment for non-payment of a poll tax b. Progressive/Graduated(PH) (e) Non-impairment of the obligation of contracts c. Regressive (f) Non-infringement of religious freedom (g) No appropriation for religious purposes (h) Exemption of religious, charitable, and educational Three (3) Main Powers of Government: entities, non-profit cemeteries, and churches from 1. Police Power property taxation - State’s capacity to maintain safety, well being, and (i) Exemption of non-stock, non-profit educational comfort of its people institutions from taxation - Legislative regulates conduct (j) Concurrence by a majority of all the members of 2. Eminent Domain Congress for the passage of a law granting tax - Power of govt. to buy property of its people exemption 3. Taxation (k) Power of the president to veto any particular item or - Most comprehensive, most important, all items in a revenue or tariff bill encompassing (l) Non-impairment of the jurisdiction of the Supreme - Power of govt. To buy property of its people Court in tax cases - Purpose: revenue and non-revenue (public (2) Inherent Limitations schools/health) (a) Requirement that levy must be for a public purpose (b) Non-delegation of the legislative power to tax Lifeblood Doctrine: importance of taxes in the whole of (c) Exemption from taxation of govt. Entities statehood (d) International comity (e) Territorial jurisdiction Necessity Theory: taxes are needed by the govt. for it to function
Symbiotic Relationship: people’s taxes needed by the