Essay: Fiscal Law And Responsibilities

Essay: Fiscal Law and Responsibilities

Understand basic laws and even routine mathematical operations and interpret tax tables can present problems.

• Fiscal Evasion: Fiscal evasion is the inability to declare taxable activity or income and this is a practice in the use of services such as consulting, builders, plumbers and decorators. This intentional breach requires that the taxpayer have some measure of understanding of the tax system.
• Weak fiscal system: this can also lead to the intentional breach of tax laws, since taxpayers can use gaps in the fiscal system. As such, this encourages taxpayers not to comply, since they have the security of not being processed.

Regarding my position with the issue, I consider people to work hard and earn money that they would ideally like to retain for themselves. However, an important part of this must generally be delivered to the State. In my opinion, it is correct for people to pay for their fair part of taxes. Money is everything in the livelihoods of today. This is because money is used to buy everything necessary, such as food, water and housing. The money is also used to help the children of a family in the form of school quotas and other activities. In addition to this, people not only need money to meet their needs, but also for future investments. The more people have to invest, the more they believe they can accumulate their long -term money. As a result, many are reluctant to lose part of their income through tax deduction.

However, citizens should be obliged to pay government taxes for several reasons. They should accept that the taxes they pay helps the government to offer them public services throughout the country. The same tax money helps to make the country’s economy stable. Through taxes, the government can pay their debts. In summary, tax money is a way to ensure that people have comfortable and quality livelihoods. Although many people think they should not pay taxes, that money is useful for the stability of any country. Therefore, people should not avoid paying taxes, since they can affect the economy and services of the country it provides, which in this case is Mexico.

In contrast, taxes can increase the expenses that companies face, which makes them more difficult to achieve profitability. Companies pay numerous taxes, such as payroll taxes on employee salaries, property taxes, commercial taxes and permissions and licenses. Company -related taxes leave less money for expanding companies through investment and hiring. High taxes on companies can promote the outsourcing of operations abroad.

Sometimes reference is made to taxes as a ‘redistribution of wealth’ because different people face different tax burdens and some people benefit more from government programs than others. The Federal Income Tax is a progressive tax system, which means that higher revenues pay a greater proportion of their tax revenues than those with lower income, however, this can be interpreted as that this system punishes thesuccess.

On the other hand, taxes increase the power of the government, because theoretically a government can support more programs if you have more income. The opponents of a strong government argue that the private sector instead of government agencies should assign resources and provide services. Government agencies may be influenced by external factors such as policy and special interest groups, while private companies tend to focus on profitability, which requires efficient use of resources.

Finance obtained by imposing taxes have been used by the country and its functional equivalents conventionally to carry out a series of functions. Some of these include as already mentioned: Property Protection, War Expenses, Economic Infrastructure, Application of Public Law, Public Works, Subsidies, Social Engineering and the Government’s very operation. Governments use taxes to finance well -being and public services. Energy, water and waste management systems are also common public services. A part of taxes is used to relieve state debt and the interest generated by this debt.

The level of per capita income is a powerful determinant of the nature of the taxes that the country will adopt, the higher the level of per capita income, the more a country of direct taxes depends, in particular on personal income. Consumer taxes, although they increase more slowly, tend to be relatively important in developed countries. These differentiations in tax structures reflect the basic differences between high and low income countries. It is observed that low -income countries tend to raise additional income on the border, since some collection points require control. For this reason, they depend largely on special taxes on tobacco, alcohol, etc. In contrast, direct taxes require a more effective tax administration together with sophisticated taxpayers, these conditions prevail in developed countries.

Governments use various types of taxes and vary tax rates. This helps distribute the fiscal burden between individuals or classes of the population involved in taxable activities, such as business, or to reallocate resources in the midst of individuals or classes in the population. Modern Social Security systems tend to support the poor, retirees or disabled, taxing the working class. In addition, taxes are collected to finance military companies and foreign aid, to substantially influence the macroeconomic performance of the economy, or to modify employment or consumption patterns within an economy, this is made making some kinds of transactions more orless attractive.

The efficient, fair and stable financial markets perceive the important characteristics of a modern economy, whose contribution is vital and significant for the general financial system. The ways in which nations increase taxes are as varied as the amounts that collect. The country’s tax patterns are formulated on a series of factors such as their inherent economic structure, their history and, to a large extent, about the tax structures of their neighboring countries. The choice plays an important role, since different countries can assign different levels of importance to the commonly established characteristics of a higher tax system, such as equity, the required economic effects and the collection costs that entails.

The Tax System of the Nation undoubtedly reflects its communal values and the values of those in power. To create a tax system, the country constantly faces elections regarding the distribution of the tax, who will pay and how much, and the cost expense of the taxes collected. In democratic nations where the public chooses those responsible for establishing the tax system, these exhibited elections are a reflection of the community that the public wishes to create. While in countries with insignificant public influence on the tax system, it reflects the values of those in power in the tax system.

Therefore, taxation is not only a means to finance the government, but it is one of the most visible parts of social contracts underlying the State. A key reason why citizens conform to fiscal impositions is that they accept the State as legitimate and credible and, therefore, are both, to some extent, anxious to support it and, to some extent, fearful of what will happenIf they do not. Unless states are accepted as justifiable in this regard, they will be unable to ensure the sufficient resources necessary to govern or develop. In this framework, the success of the tax reform depends clearly on the method by which the different political groups recognize the reform and how they respond to their perception.

In the design of an efficient tax system, it is imperative that the aforementioned issues be taken into account. Taxes impose real economic costs, therefore, it is imperative that all countries seek measures to reduce such ‘dead weight losses’, which decrease accessible resources to achieve the socially required objectives. Countries with limited resources must adopt tax policies to help ensure that these assets are used in the most ingenious way possible. Taxes have a price label when it amounts to collection. Another fiscal cost is the “compliance costs” that taxpayers must support when they fulfill their tax obligations, which is above the real fiscal value. Tax organization and compliance interrelate in many ways. Finally, taxes give rise to ‘dead weight’ or ‘distortion’ costs. Salary taxes reduce incentives to work. It is observed that the higher the tax rate on profits in the formal sector, working in the formal sector is less attractive than in the non -taxed informal sector. Consumer taxes also discourage work.

A good fiscal policy involves minimizing unnecessary tax expenses. To minimize the cost, three general rules can be observed: first, the tax bases must be as wide as possible. A broad base consumption tax, for example, will continue to discourage work effort, but this tax will minimize distortions in the consumption of goods if all or most goods and services are subject to taxes. Second, the tax must be low, given the need for income to finance government operations. The reason is simply because the cost of efficiency of taxes arises from its effect on relative prices, and the size of this effect is directly related to the tax rate. Third, from an efficiency perception, it is important that special attention to production taxes be given. Production taxes have an effect on the location of companies, modifying the ways in which production is produced, changing the organization of commercial practices, etc.

An example for the tax situation is income tax, since this is the main form of government income. Thus, the highest income would pay higher income taxes and, therefore, the Government may raise more income. The government collects part of income tax revenues. This tax accumulation is used to provide various services for citizens to live comfortably, such as health, education, medicine, technology, research and development, finance, foreign issues and constructions. Therefore, income tax fulfills a useful function that provides the quality of citizens’ life styles.

On the contrary, the Income Tax does not actually work in the theoretical sense, because the people of the highest income do not pay the highest taxes. As society changes rapidly, sources of income have also changed and the amount of ways to evade taxes is increasing. However, because the current income tax system is not updated with a trend, those with lower income would have to assume costs. Therefore, real income taxes would not be effective and efficient compared to their theory.

To support the above, it is said that these processes do not usually work in the way in which it is expected, even with the laws to maintain control in contributions. This can be caused by having an inefficient tax structure, whose problems are often a noticeable difference between the resources that are extracted from taxpayers and the amount that is destined for public spending, in addition to the combination of encumbrances with which theTax structure. In other words, for each contribution provided by the company, a lower percentage is returned by virtue of the costs incurred, there may also be a combination of taxes that alter the economy with consequences on its growth in the future and, byTherefore, it also puts the collection of the future at risk.

In these cases raised, the tax structure stops fulfilling its objective related to income to support government expenses, as well as the redistribution of income and wealth. Given the above, I can affirm that to my consideration, the fiscal structure in the country is inequitable and distant to a potential collection, since there is no evidence that public spending is sufficiently suffered. In addition to this, the tax structure is a financial system that contracts private spending to cover public spending;This by establishing various taxes that can tax in general terms or consumption of citizens. However, the problem in this type of systems is that the extraction of resources from society can modify the behavior of economic agents.

Although it is necessary to understand that the activities of the State imply an expense, the possibility of forming a tax structure that leads to a lower damage for economic growth together with the consolidation of a tax structure that favors long -term growth that favors long -term growth must be sought. To do this, I consider that any tax structure should have a design of taxes that are simple for the administration by the authorities and also for their fulfillment that is the responsibility of the citizens. In this way, taxpayers’ costs and taxpayers would be reduced. However, the complexity of the tax structure originates from the search for a progressive tax structure.

Conclusions

As mentioned in this essay, fiscal law deals with the relationship between taxpayers and the State, as well as the economic and financial activities that confer them. It is important to note that the two parties need them to conserve social harmony, so that this represents a bilateral relationship process. Likewise, the fulfillment of these fiscal mandates is supported by law, without neglecting the rights of citizens. Finally, fiscal law marks a contribution that must be made in a mandatory manner with the principle of ensuring community good.

With this, it can be concluded that the fact that the current tax structure and its collection capacity have certain deficiencies, so that the income submitted are not the same as those observed. It is also noteworthy that the fiscal structure must be integral with the objective of being able to distinguish the characteristics of taxes and institutions that are responsible for administering them.

Finally, I consider that a good way to increase the collection of the country is reactivating the economy, so that taxpayers can fulfill their fiscal obligations more easily thanks to the profitability of business and formal works. However, for the above, tax policies must also be involved so that fiscal discipline can be maintained.