The benefits received principle of taxation asserts that people and businesses who receive the benefit of a good or service financed by taxes should pay the tax it requires. The ability to pay principle is the opposite of the benefits received principle.Continue Reading
It can be difficult for governments to implement the benefits received principle because of its nature. It is not easy to measure the benefits that certain people receive from a public good. Most governments, however, normally implement taxes in cases where benefits are easily identified.
Charges, fees and taxes are often levied against those who use public universities, gasoline or national parks. Because the specific people who use these government resources receive much of the benefit from their existence, those people are asked to pay for the benefit they received. As an example, gasoline taxes are often used to construct and repair highways. This is because those who buy gasoline are assumed to be the users and the major beneficiaries of roads and highways.
The ability to pay principle is very different from the benefits received principle. The ability to pay principle asserts that the tax burden should be split up according to how able someone is to pay for government services.Learn more about Taxes
The main benefit of the tax on Social Security benefits, which is only levied on those who have substantial incomes other than Social Security, is that it reinforces the Social Security system. The tax amount collected on Social Security benefits is distributed back into Social Security and Medicare trust funds.Full Answer >
There are several online services that allow taxpayers to file their federal income taxes for free; the Internal Revenue Service offers a tax preparation service that is free for almost everyone. This service is called Free File.Full Answer >
An Electronic Federal Tax Payment System Payment, or an EFTPS payment, is a tax payment service provided by the US Department of the Treasury to pay any taxes due to the federal government, notes the EFTPS website. Enrollment in the service is required prior to using it.Full Answer >
A tax benefit exists for donating old appliances or other household goods to a nonprofit organization, according to Internal Revenue Service Publication 526, Charitable Contributions. The organization must be a recognized nonprofit registered with the IRS, unless it is a church or governmental organization.Full Answer >