Understanding Different Approaches to Benefit‐Based Taxation

Abstract

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Tax Administration, Tax Incentive and SMEs’ Growth: The Moderating Effect of Firms Size

“…This finding supports H1. This finding justifies the position of the benefit theory of tax that advances the argument that taxes that agents pay should reflect the benefit that they receive from the mix of good and services they enjoy from the state (Neill, 2000), thereby setting the standard lens through which local taxation is based (Scherf & Weinzierl, 2020). The finding is explained by the logic that since government creates the environment and climate for business growth, SMEs, in turn, comply with the directives regarding tax administration, and this eventually leads to improved business growth among the SMEs.…”

“…Tax incentives are underlined by the benefit theory of tax that advances taxes that agents pay should reflect the benefit that they receive from the mix of good and services they enjoy from the state (Neill, 2000). The benefits theory of tax sets the standard lens through which local taxation is based (Scherf & Weinzierl, 2020). It, therefore, posits taxes should be zero or low for entities and individuals who receive no benefits from the state and high for those entities and individuals that derive the most benefits.…”

Tax Administration, Tax Incentive and SMEs’ Growth: The Moderating Effect of Firms Size

“…This finding supports H1. This finding justifies the position of the benefit theory of tax that advances the argument that taxes that agents pay should reflect the benefit that they receive from the mix of good and services they enjoy from the state (Neill, 2000), setting the standard lens through which local taxation is based (Scherf & Weinzierl, 2020). The finding is explained by the logic that since government creates the environment and climate for business growth, SMEs, in turn, comply with the directives regarding tax administration, and this eventually leads to improved business growth among the SMEs.…”

Where Do My Tax Dollars Go? Tax Morale Effects of Perceived Government Spending

“…Benefit-based reasoning was a prominent, and at times leading, approach among tax theorists in the early twentieth century (Seligman, 1908;Musgrave, 1959). 15 However, it has been largely ignored by the modern optimal taxation literature, which instead focuses exclusively on efficiency (Weinzierl, 2018;Scherf and Weinzierl, 2020). Besides benefit-based taxation, a growing body of work is trying to incorporate other normative considerations into tax policy design (Mankiw and Weinzierl, 2010;Weinzierl, 2014;Saez and Stantcheva, 2016;Lockwood and Weinzierl, 2016).…”