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On the meaning of "tax"

journal contribution
posted on 2018-01-01, 00:00 authored by Mark Smith, Huigenia Ostik
Abstract: Common-law jurisprudence characterises a tax as a compulsory payment imposed by a public body for a public purpose under the authority of the legislature. While useful in many situations - and despite judicial statements that a tax is not a penalty, fine or user charge - this understanding of a tax fails to make clear how some other transactions should be classified. This is arguably because certain elements of the common-law characterisation are lexically inappropriate, logically redundant and inconsistent with extant decisions. This article proposes an alternative. It argues that a tax is a compulsory transfer of value imposed primarily for a redistributive purpose. This definition is purposive (it lends insight into the appropriate aims of taxation), universal (the focus on redistribution distinguishes taxes from other payments to government) and practicable (it promotes fiscal transparency and clarifies the actual financial contribution each and every natural and legal person makes to the public finances).

History

Journal

Australian tax forum

Volume

33

Issue

3

Pagination

601 - 619

Publisher

Taxation Institute of Australia

Location

Sydney, N.S.W.

ISSN

0812-695X

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal; C Journal article

Copyright notice

2018, Taxation Institute of Australia