commission on fiscal imbalance 合集

Full tax sovereignty comprises letters a to h in the

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Unformatted text preview: e social security. In 1993, the highest deficit ever was 16 325 Millions SFr. or 4.6 per cent of the GNP. This result did not respect one of the Maastricht criteria, namely that the total deficit of the public sector, including social security, should not exceed 3 per cent of GNP. 71 Commission on Fiscal Imbalance 3.4.2. Tax sovereignty There is a long unending debate about the conceptual definition of tax sovereignty. Tax sovereignty concerns both the ability of a government to decide which taxes it should invent and raise, the direct access to taxation and the management of taxes. Let us summarise the general setting in the formula: T = t × [ B - (D1, D2, D3, …Di, … Dn )] × ( KFed + Kcanton + Kcommune ) Where T t B D K revenue from a tax the tax rate schedule the gross tax base the possible deductions from the tax base the annual coefficient aiming at a balanced (current ?) budget. Referring to this formula, the extent of tax sovereignty can be measured in the following sequences of choice : a) b) c) d) e) f) g) h) the use of the ability-to-pay principle (taxes) versus benefit principle (user charges); the object of taxation, implicit in […] in the formula above; the circle of taxpayers (including the definition of the taxpaying unit); the computation of the tax bases (for example, for the taxation of income: the definition of gross income [B], and the adjustments to taxable income, specific deductions and exemptions) [Di]; the tax rate schedules [t] , including the amount of deductions and exemptions in the previous letter [Di]; the annual coefficient of taxation [Kjj]; collecting the taxes; the procedure in case of tax dispute. Full tax sovereignty comprises letters a) to h) in the list above. Partial tax sovereignty exists where a government can decide a) and some but not all items listed between b) and e). Tax flexibility means that a government can at least decide on the coefficient of taxation (f) but has no access to defining the kind of taxes it can raise. Compulsory taxation qualifies taxation where a government has no choice over a) to f) and must raise taxes (or user-charges) according to the regulations set by a higher level of government. ♦ In Switzerland, tax sovereignty lies primarily in the Cantons and secondarily in the Confederation to such an extent that it is stated in article 128 to 134 of the New Federal Constitution. The Cantons are largely free to structure and frame their tax system and to decide the tax burden. This freedom is restricted only by the Federal Court's jurisprudence that prohibits, in particular, double taxation or unjustified tax rebates. In addition, the Cantons are bound by three articles in the federal Constitution which allocate indirect taxation (VAT in article 130 Cst., and special consumption taxes in article 131 Cst.) exclusively to the centre and another that forbid taxes in the form of tariff barriers (art. 133 Cst.) which could impede the free movement of goods between the Cantons. In this situation of joint taxation, tax sovereignty means...
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This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

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