States making drug laws

 

Should states be allowed to make drug laws?

 

 

Sample Solution

Introduction

Income is considered as the main indicator of tax paying ability. Since taxation is now focused on controlling economic conditions whilst keeping equal distribution of income, the primary concern of most countries’ governments is to have a pleasing income tax system. Progressive income tax structures are generally encouraged to best serve equity during the course of allocation of tax burdens. Literature and economic theory define tax being “good” with at least 4 main characteristics of the system, first contributed by Adam Smith’s famous book, “The Wealth of Nations” (Smith, 1776).

Smith’s Canons

Equity

Adam Smith wrote that “the subjects of every state ought to contribute towards the supports of the Government, as nearly as possible, in proportion to their respective abilities, that is, in proportion to their revenue which they enjoy under the protection of the state” (Smith, 1776).. It is in favour of a progressive tax structure and implies that tax should be paid on a rate schedule. The UK uses this system on their income tax, with an allowance of £11,850 (as of 2018/19) (UK Government, 2017) tax free to help low receivers of income, and anything over is taxed at various rates based on the band in which they fall. The design of the rate schedule should reflect the best available evidence on how responsive people at different income levels are.

Certainty

This cannon suggests that the tax needed to be paid, the place and other procedural information should be certain to the tax payer. This protects the individual from exploitation from the tax authorities. This also means the government should be able to estimate the tax yield within a certain degree of accuracy, so expenses can be managed. The system should have some degree of flexibility so t

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