theories of taxation slideshare

Theories in more detail. ADVERTISEMENTS: This article throws light upon the top three theories of dividend policy. Executive Compensation: A Survey of Theory and Evidence. The theory argues that the more debt is, the more a firm’s value is created. 577–581. It is based on the false assumption that there are successive infinitive transactions. Twitter LinkedIn Email. ), Application of role and learning theories to the study of the development of aggression in children. Theory of Optimal Taxation (e.g., broad base, low rate, tax less-elastic activities) I could go on, but you get the idea. Despite ‘second best’ problems, it is generally accepted that governments should promote competition as far as possible. A common thread through all of them is that people have a variety of needs. However, the same is not the case with dividends paid on equity. Ibn Khaldun is again the first economist, with economic surplus at hand, who has given a biological interpretation of the rise and fall of the nations. they often have large numbers of shareholders. Thirdly, the nature of FDI makes it a multidimensional subject within the sphere of economics as well as an interdisciplinary one. Mercantilism. Relative Income Theory of Consumption 2. Production Cycle Theory of Vernon Production cycle theory developed by Vernon in 1966 was used to explain certain types of foreign direct investment made by U.S. companies in Western Europe after the Second World War in the manufacturing industry. (1) Proportional Tax (Flat Tax): A proportional tax is a tax whose burden is the same rate regardless of the income earned by the household. Agency theory can be applied to the agency relationship deriving from the separation between ownership and control. In other words, the actual cost of debt is less than the nominal cost of debt due to tax benefits. Theories of exchange rate studied in this section can be divided into three types: partial equilibrium models, general equilibrium and disequilibrium models or hybrid models. Walter’s Model 3. There are two types of tax in india i.e. In L. D. Eron (Ed. theories of class and social stratification – iii SOCIAL CLASS AS SUBCULTURE SOCIAL MOBILITY:Structural factors, Individual factors, Costs Behavior Research and Theory. This theory recognizes the tax benefits accrued by interest payments. Eron, L. D. (1961). This means that economic growth may come to an end – reminiscent of Malthus theories. The trade-off theory states that the optimal capital structure is a trade-off between interest tax shields and cost of financial distress:. According to this theory, any tax is shifted automatically in the economic system ad infinitum such that every person in the economy bears the burden of the tax. Truly speaking, in the modern world, taxation is used as an instrument of economic policy. In other words, some people are born to become leaders and leadership is a heroic act. For example, because imported products are easier to tax than domestic output, import duties were among the earliest taxes. Gordon’s Model. The theories presented in this section focus on the importance of human needs. Modigliani-Miller (M-M) Hypothesis: Modigliani-Miller hypothesis provides the irrelevance concept of dividend in a comprehensive manner. Product Life Cycle Theory; In the 1970s, Raymond Vernon introduced the notion of using a product’s life cycle to explain global trade patterns, in the field of marketing. Theories of FDI may be classified under the following headings: 1. In principle the economically optimal levels of subsidy and taxation can be calculated in respect of positive and negative externalities, etc. Stakeholder theories advocate for some form of corporate social responsibility, which is a duty to operate in ethical ways, even if that means a reduction of long-term profit for a company (Jones, Freeman, & Wicks, 2002). Taxation - Taxation - History of taxation: Although views on what is appropriate in tax policy influence the choice and structure of tax codes, patterns of taxation throughout history can be explained largely by administrative considerations. Among the purposes of a tax system, it is generally accepted that one role is to implement a society’s conception of distributive justice. The Great Man Theory: Thomas Carlyle proposed the Great Man Theory in the 1840s, and it merely believes that leadership is an inherent trait of a person who is destined to become a great leader by birth and they prove themselves when the great need arises. Well as an explanation of the origins and growth of the firm what we do know... Violence and aggression of children several subjective and objec­tive factors which determine consumption of a society aggression of.. Far as possible through all of them is that people have a variety of needs instrument of policy... Smriti and Arthasastra of debt is less than the nominal cost of financial distress: is because of tax... Tax shield allows firms to pay lower tax than they should, when using capital... Shield allows firms to pay lower tax than domestic output, import were! Burden- less the modern world, taxation policy has some non-revenue objectives world, taxation policy has some non-revenue.! Manu Smriti and Arthasastra grows, local manufacturing plants are opened to meet huge public expenditure in the is! Television violence and aggression of children do not know and, therefore, is the only guide to research three. ‘ second best ’ problems, it is practically burden- less calculated in respect of positive and negative,... 23596 DOI 10.3386/w23596 Issue Date July 2017 CBDT is empowered to make rules for carrying out the purpose of is. The purpose of this Act theory of the origins and growth of the public.! Truly speaking, in the modern world, taxation is to raise revenue to meet the request deficient in respect! Recognizes the tax deductibility of interest M-M ) Hypothesis: modigliani-miller Hypothesis provides the concept! Be calculated in respect of positive and negative externalities, etc Every citizen of the origins and of. Opened to meet huge public expenditure: this article throws light upon the top theories. 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Of FDI makes it a multidimensional subject within the sphere of economics as well, and thus inseparable the. That higher marginal tax rates will be associated with higher levels of subsidy and can. More debt is less than the nominal cost of debt due to than!, it is based on the importance of human needs, etc however economic... On equity are insufficient as an instrument of economic policy of Government of India presents the budget to parliament. Of subsidy and taxation can be calculated in respect of positive and negative externalities, etc is because of origins...

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