Tax Rate

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Tax Rate


the amount of tax levied per unit of taxation, for example, per hectare of land or per ruble of income.

The tax rate expresses the norm of tax collection and is set by legislation. Tax rates may be fixed, proportional, progressive, and regressive. Fixed tax rates are established as an absolute sum per unit or object taxed, regardless of the amount of income, and are ordinarily used in taxing small plots of land. In the USSR, fixed rates are applied in collecting the agricultural tax on the private plots of kolkhoz members. Proportional tax rates are set at a definite percentage of income, regardless of the total amount. In the USSR, for example, proportional rates are used to levy an income tax on the income earned by consumer cooperative societies.

Progressive tax rates increase as the amount of taxable income increases. A distinction is made between simple and complex, or sliding, progressions. Under a simple progression, the rate increases with the amount of taxable income and is applied to the total amount of income or total value of the object being taxed. Under a complex progression, the rate increases only for the portion valued in excess of a predetermined preceding step. Progressive rates are used primarily in the levying of income taxes on the populace of the USSR and foreign countries.

Regressive tax rates diminish as the amount of income increases. Regressive taxation is clearly seen in the mechanism of indirect taxes on consumer goods that exists in every capitalist country. Under capitalism, special tax rates are frequently used to give certain advantages to large companies and corporations.


References in periodicals archive ?
8) Table 1, based on details given in Young (2002), shows the commodity groups used and the effective tax-exclusive ad valorem tax rates for 2001.
To simulate the effects of an increase in the excise tax, it is required to calculate the tax-exclusive price and the effective ad valorem tax rate on petrol, given information about the consumer price (which is tax-inclusive) of petrol per litre, along with the excise per litre and the GST rate.
said Friday it will effectively cut the prices of its GameCube and Game Boy Advance SP video game consoles by changing their pricing to tax-inclusive from tax-exclusive on Monday.
By correcting for these assumptions by holding the real size of government constant, the author discovers that the required tax inclusive national sales rate would be more than 50 percent and the required tax-exclusive sales rate would be more than 100 percent.