Levy of tax on tax
A surtax is a tax levied upon another tax, also known as tax surcharge. [1]
| Part of a series on |
| Taxation |
|---|
 |
| An aspect of fiscal policy |
A surtax is a tax levied upon another tax, also known as tax surcharge. [1]
The provincial portion of the value-added tax on goods and services in two Canadian jurisdictions, Quebec and Prince Edward Island, was formerly calculated as a surtax on the sticker price plus the federal Goods and Services Tax. On Prince Edward Island, provincial sales tax was assessed at 10% on top of the federal tax (as of 2013) of 5%, resulting in a total effective rate of 15.5% at the time of its repeal. [2] The Quebec Sales Tax was 9.5%, also assessed on top of the federal tax of 5%, resulting in a total tax burden of 14.975; it, too, was changed in 2013 so as no longer to be a surtax.
In 1929, the supertax (which had been introduced in the Finance Act 1909 at the rate of 6 old pence in the pound (2.5%) on incomes over £5,000 per year) was renamed to surtax. By 1934, the rate was variable from 1 shilling to 7 shillings and sixpence in the pound (5% to 37.5%). It was replaced by income tax in 1973.
| Year | Income tax | Surtax | Total |
|---|---|---|---|
| 1939–40 | 29% | 41% | 70% |
| 1944–45 | 50% | 48% | 98% |
Previous examples of a broadly-levied surtax in the United States include one imposed to help finance the Vietnam War during the Lyndon Johnson administration. It essentially consisted of calculating one's ordinary federal income tax liability and then adding another 10% to it, the amount of the surtax.
As the US income tax system at the time was highly progressive, the surtax was much higher on those with higher incomes, as a 10% surtax imposed on a tax rate of 20% would result in an overall rate of 22%, and the same surtax imposed on a rate of 50% would result in an overall rate of 55%.
Some antiwar protesters refused to pay the tax and stated that while they were not anarchists and understood the need for and the positive role played by government in many areas, they wanted none of their tax money going to a war that they felt was immoral.[ citation needed ] The surtax was repealed well before the Vietnam War ended.
Surtaxes can be imposed on other taxes. They are usually imposed on the grounds of moral justification, as they affect only persons who are already paying taxes, rather than extending taxation to new areas or persons who are not previously being taxed.
A surtax of 4.3 percent was recently proposed by Congress on incomes over $500,000 to alleviate the alterations to the Alternative Minimum Tax code in the United States.[ when? ]
A surtax was proposed as part of the 2009–2010 health care reform in the United States. [4]
A poll tax, also known as head tax or capitation, is a tax levied as a fixed sum on every liable individual, without reference to income or resources. Poll is an archaic term for "head" or "top of the head". The sense of "counting heads" is found in phrases like polling place and opinion poll.
A tax is a mandatory financial charge or levy imposed on a taxpayer by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax compliance refers to policy actions and individual behavior aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing the correct tax allowances and tax relief. The first known taxation occurred in Ancient Egypt around 3000–2800 BC. Taxes consist of direct or indirect taxes and may be paid in money or as labor equivalent.
An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them. Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and the type of income.
The goods and services tax is a value added tax introduced in Canada on January 1, 1991, by the government of Prime Minister Brian Mulroney. The GST, which is administered by Canada Revenue Agency (CRA), replaced a previous hidden 13.5% manufacturers' sales tax (MST).
In Canada, there are two types of sales taxes levied. These are :
Excise tax in the United States is an indirect tax on listed items. Excise taxes can be and are made by federal, state, and local governments and are not uniform throughout the United States. Certain goods, such as gasoline, diesel fuel, alcohol, and tobacco products, are taxed by multiple governments simultaneously. Some excise taxes are collected from the producer or retailer and not paid directly by the consumer, and as such, often remain "hidden" in the price of a product or service rather than being listed separately.
In Canada, taxation is a prerogative shared between the federal government and the various provincial and territorial legislatures.
An ad valorem tax is a tax whose amount is based on the value of a transaction or of a property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT). An ad valorem tax may also be imposed annually, as in the case of a real or personal property tax, or in connection with another significant event. In some countries, a stamp duty is imposed as an ad valorem tax.
In addition to federal income tax collected by the United States, most individual U.S. states collect a state income tax. Some local governments also impose an income tax, often based on state income tax calculations. Forty-one states, the District of Columbia, and many localities in the United States impose an income tax on individuals. Eight states impose no state income tax, and a ninth, New Hampshire, imposes an individual income tax on dividends and interest income but not other forms of income. Forty-seven states and many localities impose a tax on the income of corporations.
Sales taxes in the United States are taxes placed on the sale or lease of goods and services in the United States. Sales tax is governed at the state level and no national general sales tax exists. 45 states, the District of Columbia, the territories of Puerto Rico, and Guam impose general sales taxes that apply to the sale or lease of most goods and some services, and states also may levy selective sales taxes on the sale or lease of particular goods or services. States may grant local governments the authority to impose additional general or selective sales taxes.
Income taxes in Canada constitute the majority of the annual revenues of the Government of Canada, and of the governments of the Provinces of Canada. In the fiscal year ending March 31, 2018, the federal government collected just over three times more revenue from personal income taxes than it did from corporate income taxes.
Income taxes are the most significant form of taxation in Australia, and collected by the federal government through the Australian Taxation Office (ATO). Australian GST revenue is collected by the Federal government, and then paid to the states under a distribution formula determined by the Commonwealth Grants Commission.
Taxes in India are levied by the Central Government and the State Governments by virtue of powers conferred to them from the Constitution of India. Some minor taxes are also levied by the local authorities such as the Municipality.
An excise, or excise tax, is any duty on manufactured goods that is normally levied at the moment of manufacture for internal consumption rather than at sale. It is therefore a fee that must be paid in order to consume certain products. Excises are often associated with customs duties, which are levied on pre-existing goods when they cross a designated border in a specific direction; customs are levied on goods that become taxable items at the border, while excise is levied on goods that came into existence inland.
Taxation in Norway is levied by the central government, the county municipality and the municipality. In 2012 the total tax revenue was 42.2% of the gross domestic product (GDP). Many direct and indirect taxes exist. The most important taxes – in terms of revenue – are VAT, income tax in the petroleum sector, employers' social security contributions and tax on "ordinary income" for persons. Most direct taxes are collected by the Norwegian Tax Administration and most indirect taxes are collected by the Norwegian Customs and Excise Authorities.
Inheritance and gift taxes in Canada have a complex history dating back to Canadian Confederation. They are beginning to see a return to prominence in the provincial sphere.
The Land Tax was a land value tax levied in England from 1692 to 1963, though such taxes predate the best-known 1692 Act. It was abolished by the Finance Act 1963. Taxes on land date back to the Norman Conquest and beyond, and the Land Tax introduced in 1692 was a natural successor to taxation acts in 1671 and 1689, but the 1692 act "has been regarded as a turning point in the history of English revenue collection. It was from this Act that contemporaries and historians alike date what has come to be known as the eighteenth-century Land Tax". The land tax elements of the 1671, 1689 and 1692 Acts were limited to one year but the 1798 Act made the tax perpetual.
The Canadian federal budget for fiscal year 1989–90 was presented to the House of Commons of Canada by finance minister Michael Wilson on 27 April 1989. It was the first budget after the 1988 Canadian federal election.
The Canadian federal budget’for fiscal year 1994–95 was presented by Minister of Finance Paul Martin in the House of Commons of Canada on 22 February 1994. It was the first federal budget under the premiership of Jean Chrétien.
The 1985 Canadian federal budget for fiscal year 1985–86 was presented by Minister of Finance Michael Wilson in the House of Commons of Canada on 23 May 1985. This is the first federal budget under the premiership of Brian Mulroney, and generally increased taxes.