What problems are experienced in attempting to achieve justice in taxation? Support your answer with the four main theories which explain why it is difficult to exercise justice in taxation

Problems in achieving justice in taxation


  • Distribution of taxation can be considered and treated as payment for public services and
    a payment equal to the cost of the services rendered.
  • People can pay tax in proportion to benefits derived from the state activity.
  • Sacrifice by the tax-payer should be taken into account.

Problems experienced:

(i) Cost theory:- method of specific payment for public services does not result in justice in the distribution of the burdens of taxation.

Citizen normally not at liberty to reuse the services of the state and by refusing is not able to escape the necessity of paying taxes.

(ii) Benefit theory:- weak and the poorer people receive great benefits from the government in the form of free education, but they are least able to bear the burden of taxation.

Impossible to determine the proportion of the general benefits of government expenditure that accrue to particular individuals.

(iii) Equal sacrifice theory:- not feasible to levy heavy taxes on the rich and to leave the general public free as such tax would discourage savings and investment.

(iv) Ability theory:- difficult to measure ability to pay. Property may not be a good indicator of ability to pay.

Expenditure incurred may not necessarily be an indication of ability to pay because amount of expenditure could be due to number of dependants.

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