General purposes of taxation. - Wealth of Nations (Adam
Smith) provides that a good tax system must have the following:
1) The
subjects of every state ought to contribute to and support the government
as near as possible in proportion to their respective
abilities i.e. in proportion to revenue they respectively enjoy under the
protection of that state.
2) The tax
which each individual is bound to pay ought to be certain and not arbitral
3) Each
tax ought to be levied at the time in the manner it is most likely to be
convenient for contributors to pay it.
4) Every
tax ought to be so contrived as both to take out of and take out of the pockets
of the people as little as possible over and above that which it brings to the
public treasury of the state.