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Venture capital program research and development

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Venture capital program § Research and development program § Film production program § Reported in  Tax Expenditures  Statements Arguments for and against Arguments for and against     tax expenditures tax expenditures § Arguments for tax expenditures: § Overcome “double-handling” issues § Arguments against tax expenditures:
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§ Poorly targeted – can benefit  unintended recipients § Upside-down effect – exemptions and  deductions benefit high rate taxpayers  more than low rate taxpayers § Adds complexity to the tax law as  programs are hidden within the tax  legislation § Often overlooked when taxes are  reformed Structural features of taxes Structural features of taxes § Taxpayers § The legal entities who are liable to  pay the tax and who can be sued if it  is not paid § Tax base § The property, transaction, activity or  concept on which the tax is imposed § Tax periods
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§ The period in relation to which tax is  paid § Tax rates § May be single rate (eg flat rate) or  differing rates (eg progressive rates) Proportional, progressive Proportional, progressive     & regressive taxes & regressive taxes § Proportional taxes § Imposed at the same rate for all  taxpayers (eg GST) § Progressive taxes § Imposed at rates that increase with  amount of tax base (eg income tax) § Regressive taxes § Imposed at rates that decrease with  amount of tax base Marginal, average & Marginal, average &    
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effective tax rates effective tax rates § Marginal tax rate § The rate of tax that is applied to the  incremental amounts of the tax base § Average tax rate Taxpayer’s total tax liability     Tax base § Effective tax rate Taxpayer’s total tax liability           Taxpayer’s total economic  income
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