General Principles of Taxation

Flashcards covering the general principles, powers, doctrines, and limitations of taxation as outlined in the lecture notes.

How is taxation defined as a power?

It refers to the inherent power of the state to demand enforced contribution for public purpose to support the government.

What is taxation as a process?

The legislative act of laying a tax to raise income for the government to defray its necessary expenses.

According to Isagani Cruz, how is taxation described in terms of benefits and burdens?

It is a way of apportioning the costs of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens.

Can the central legislative body delegate the power of taxation to the executive or judicial departments?

No, it cannot delegate this power without infringing upon the theory of separation of powers, except in the case of municipal corporations for matters of local concern.

What was the ruling in Caltex Philippines vs. Commission on Audit ($G.R. No. 92585$) regarding the regulatory purpose of taxation?

Taxes may be levied with a regulatory purpose to provide means for the rehabilitation and stabilization of a threatened industry which is affected with public interest.

What are the three inherent powers of the State?

1. Power of Taxation, 2. Police Power, 3. Power of Eminent Domain.

Compare the relationship of Taxation, Police Power, and Eminent Domain with the 'Non-Impairment Clause' of the Constitution.

Taxation is inferior to the clause; Police Power is superior to the clause; Eminent Domain is superior and may override the clause because the welfare of the state is superior to private contracts.

What is the Life Blood Doctrine as established in CIR vs. Algue?

Taxes are the lifeblood of the government and are indispensable to its existence; they should be collected without unnecessary hindrance.

What is the Symbiotic Relationship Doctrine?

The government and the people have reciprocal duties of support and protection; taxes are what we pay for a civilized society in exchange for benefits intended to improve life.

What is the difference between Vertical Equity and Horizontal Equity in the Ability to Pay Theory?

Vertical equity means those who have more should pay more (progressive tax), while horizontal equity means those in similar situations/incomes should be treated equally.

Which Chief Justice is often attributed with the phrase 'the power to tax is the power to destroy' in the case of McCulloch vs. Maryland?

Chief Justice John Marshall.

Name at least five Constitutional Limitations of the taxation power.

1. Due process of law, 2. Equal protection, 3. Uniformity in taxation, 4. Progressive scheme of taxation, 5. Non-imprisonment for non-payment of poll tax.

What are the five inherent limitations of taxation, often referred to by the acronym TIP-EnD?

1. Territoriality of taxation, 2. International comity or treaty, 3. Tax exemption of the government, 4. Public purpose, 5. Non-delegation of the power of taxation.

What is the 'Situs of Taxation'?

The place of taxation, referring to the location where a tax is imposed or where the taxable event occurs.

What are the elements of Direct Double Taxation?

1. Same subject/object taxed twice, 2. Same purpose, 3. Same taxing authority, 4. Same jurisdiction, 5. Same period, 6. Same kind or character.

Explain the three types of 'Shifting' as an escape from taxation.

1. Forward shifting: from production to distribution to consumer. 2. Backward shifting: from consumer back to distribution to production. 3. Onward shifting: shifted two or more times.

What is the distinction between Tax Evasion and Tax Avoidance?

Tax Evasion is an illegal scheme using fraud or deceit to escape payment; Tax Avoidance is a legal tax-saving device within the means sanctioned by law.

How are tax exemption statutes generally construed?

Strictly against the taxpayer and liberally in favor of the government (strictissimi juris).

What is Tax Amnesty?

A general pardon or intentional overlooking by the state of its authority to impose penalties on persons guilty of tax evasion, giving them a chance to reform with a clean slate.

What are the three principles of a sound tax system?

1. Fiscal Adequacy, 2. Administrative Feasibility, 3. Theoretical Justice.