The origin of value added tax (VAT) can be traced to the German business man Wilhelm Von Siemens in 1918, he is credited with coming up with the idea of a VAT, for this he is also called father of VAT (Ebrill et.al, 2001). Von siemen’s VAT concept was seen as a technical innovation that brought a key improvement to the turn over tax (Thomas, 1921). However, the current popularity of VAT owes much to Maurice Laure and Carl Shoup. The recent evolution of VAT can be considered as the most important fiscal innovation of the present century. The VAT was first introduced at a national level in France in 1954.France became the first European country to implement VAT on an extensive scale. Initially it was not a complete system of VAT, since it was …show more content…
Over 143 countries now levy VAT and it is estimated that VAT currently accounts for over 20% of the world‘s tax revenue (Value-Added Tax Middle East).The VAT is designed to raise large amounts of revenue (typically 5 to 10 % of gross domestic product) without creating economic distortion. In practice, many countries, because of political pressures to use the tax system to correct social inequalities and because of their inability to tax certain sectors use exemptions and multiple rates that erode the neutrality of the VAT. Such complications make the VAT more complex and extensive to administer and increase the opportunities for evasion (Tait, …show more content…
Many thinkers believe that VAT spread globally because it is the consumption tax best suited to the revenue needs of states in an increasingly globalised economy. Even those who recognize the role of key regional and international institutions in promoting VAT often attribute the motives behind the promotion to the merit of the policy instrument itself. The rise of popularity of VAT is attributed to such virtue as the tax being the best method taxing general consumption, its neural treatment of exports, and its revenue raising capacity (Consumption Tax Trends, 2008). VAT are especially well designed to avoid taxing business input, since each component of a retail product’s value added is taxed exactly once. In other worlds, many countries replaced their poorly structured sales taxes with a better-functioning salestax.Some experts are of the view that the rationale for adopting a VAT was quite different; the VAT was adopted to replace the corporate income tax not the sales tax. Corporate income tax tends to fluctuate wildly over the business cycle because they are based on corporate profits, which vary dramatically during the periods of economic growth and downturns. Michigan’s corporate tax was especially volatile due to the importance of auto sales to its economy.A VAT is an inherently more stable and predictable revenue source than a corporate profits tax, because the tax base is a
The French Revolution was a drastic time for the people of France. In 1789, the majority of people were living in poverty and dealing with terrible conditions. People were split into three estates: the first, second, and third, the first being the wealthiest. Political, economic, and social situations were what contributed to people’s desire for change. The three main, or biggest causes of the French Revolution, were taxes, inequality, and lack of reform.
The Stamp Act of 1765 had not been a first time attempt on taxation of the Americans. The Parliament had passed the Sugar Act and Currency act the year before. Since the tax was gathered at ports, it was easily avoided. Once Parliament passed the Stamp Act in March of 1765, things started to change.
When it comes to the research the tax has affected the country in a negative way, simply because the war was fought because of taxes that were seen as not needed as well the fact that the country fought the British to oppose taxes, and then Washington turns around and imposes a tax on the people after what they sacrificed to fight for the right to be free of taxes and to be supportive of their new government was tough because people did not have money to pay taxes at
Before Britain passed the tea act research proves. “In March 1765 Britain passed a law called the stamp act that made every colonist pay for taxes on every piece of printed paper they used”(Carr). The colonist was so mad they would take out stamp act agents and later would be incarcerated. The Englishmen didn 't approve of the tax on tea research shows. “ before the dumping of the tea, there was an act made that when tea entered Boston all tea was taxed 3 pence a pound”(Macaulay).
Britain set up the unfair taxes because they wanted to and were able to do
In the late 1800s, the U.S Treasury Department used sales tax and tariffs to fund its federal budget. A tax or tariffs are funds that are paid to the government that are added when something is bought that is considered valuable. Because of the Civil war, there was a financial burden on the country. In 1861, Congress reacted by implementing taxes on individuals. The first income tax started off by taxing individuals 3% making more than $800, while people who made more than that gave up a larger percentage.
Parliament had passed the Sugar Act and Currency Act the foregoing year. Because tax was collected at ports though, it was simply evaded. Indirect taxes such as these were also much less clear to the consumer
It was created, because the Revenue Act did not bring in enough money. The new tax was imposed on all American colonists and required them to pay a tax on every piece of printed paper that was used. Ship 's papers, legal documents, licenses, newspapers, other publications, and playing cards were all taxed. The Townshend Acts of 1767 was the next tax that was passed. This tax was created by Charles Townshend on June 29, 1767 and imposed taxes on paints, paper, glass, tea, and other imports.
It wasn 't until November 1, 1765 till it took effect. “ one patriot said. The seven years of war was also part of the cause for the Act. It was because the people did not want taxes on their paper.
It all started in 1764 when the parliament started putting taxes on items and the colonists didn’t like it. The colonists thought this was unfair because they were getting taxed on out of nowhere. “... So how can the British Parliament place this tax on us?” (Henry,1765).
Why do we need money? Do we need money because of our wants or needs, or both? Money is an essential aspect in our society in which we use to supply our needs and wants. Everyone in our society thinks differently in respect towards if you have more money than more problem. In the contrary, if I were to give you a million dollars I highly doubt you will have more problems instead more problems solved because you have more money.
It started off back during the times of the French Revolution. At the moment, France seemed to be run by a monarchial regime who made all the decisions.
The 16th amendment instituted Congress's right to inflict a Federal income tax. During the Civil War, to help pay war expenses, Congress passed the Revenue Act of 1861, the first U.S. Federal income tax. This act included a tax on personal incomes. After ten years, the act was repealed, leading Congress to eventually enact a Flat Rate Federal Income Tax in 1894. This new tax stated that anyone who made more than $800 would be charged with a 3% tax and then finally a 3-5% on income that exceeds $600.
By far the most popular solution to the crisis of authority in the era of religious wars was absolute monarchy. What is absolute Monarchy you may ask? Absolute Monarchy is a form of government where it’s ruled by a king and he has an absolute power over everyone and that there is no one higher or equal to him. Even though they are similar, Absolute monarchy is not the same as dictatorship. In a dictatorship it’s ruled by one person and they usual get their power through force the people are forced to follow their orders or they will be killed or hurt.
The federal tax system is plagued with issues: It doesn 't raise sufficient revenue to back government spending, it is unpredictable, it makes results that are unreasonable, and it impedes monetary productivity. This part examines a few approaches to enhance charges, including making an esteem included duty, expanding natural taxes, improving the corporate expense, treating low-and center pay workers evenhandedly and productively, and guaranteeing suitable tax collection of high-wage family units. A good tax system raises the incomes expected to fund government spending in a way that is as basic, evenhanded, and development well growth as could reasonably be expected. The United States does not have a good tax system.