Wednesday, June 26, 2013
Understanding Puerto Rico Tax Law
By Myrtle Cash
A civilized society needs to pay levies to provide good quality of living. The most commonly known purpose for the collection of taxes is to fund operations, services and projects of the government. However, there could be several other reasons for it. It is also imposed to spread wealth in low-income citizens. The collection of levies for both business establishments and private individuals are defined by puerto rico tax law.
Taxes come in various forms, like sales levy, property tax and income taxation for individuals. Meanwhile, business establishments pay business levies. Regardless of the source, the taxes are collected for specific purposes. All of which are intended for the betterment of the nation, the state and ultimately, its citizens.
Federal income tax is the chief means for the government to fund is operations. These include federal health, education programs, national defense, federal judiciary and aid to local and state governments. The responsibility to pay the debts of the entire country and provide general welfare to its citizenry is accorded to the Congress, according to the Constitution.
Tariffs imposed on tobacco and liquor products are the first forms of taxation. Merchandise were first t be taxed. It was only in 1862 that the Congress enacted the nation's income tax in order to finance the ongoing civil war. At the end of the war, this levy was also eliminated. In 1895, the Supreme Court released a ruling deeming income taxation as unconstitutional.
Currently, a significant cut on collected levies are allocated for government administration. This is used for the expenses in government operations. Without the taxes, federal offices may be unable to provide public services, such as promoting national policies and creating laws. This is also the source of funding for security and military forces.
Moreover, taxation help redistribute wealth between the taxpayers and those who receive government assistance. The money an individual has to pay is proportional to the amount he makes in a month. Therefore, people with higher incomes are expected to pay higher levies. In turn, these are used to support middle class and low-income citizens in order to provide equal services to the citizens.
Levies being imposed on goods can influence consumer's reception as well. Depending on the government's intentions, the tariff may discourage or encourage public consumption on specific products. For example, cigarettes and alcohols have higher duties to moderate its use. Funds collected from anti-smoking campaigns may also be used to benefit the public health.
Like federal government, state and municipal governments rely heavily on local sales and income taxes to perform their basic functions. Some local governments charge property taxes to help fund for road constructions, public schools and fire departments. Sometimes, lowering the tax rates in a municipality encourage population growth, which may be advantageous to the local economy.
Other localities may have special provisions for taxation. An example is the puerto rico tax law. It was promulgated to help promote the area. It lowers the taxes by not enforcing federal income taxes to its residents. As a result, many wealthy people have decided to move in. After living on the island for 183 days a year, one may become a legal resident.
Taxes come in various forms, like sales levy, property tax and income taxation for individuals. Meanwhile, business establishments pay business levies. Regardless of the source, the taxes are collected for specific purposes. All of which are intended for the betterment of the nation, the state and ultimately, its citizens.
Federal income tax is the chief means for the government to fund is operations. These include federal health, education programs, national defense, federal judiciary and aid to local and state governments. The responsibility to pay the debts of the entire country and provide general welfare to its citizenry is accorded to the Congress, according to the Constitution.
Tariffs imposed on tobacco and liquor products are the first forms of taxation. Merchandise were first t be taxed. It was only in 1862 that the Congress enacted the nation's income tax in order to finance the ongoing civil war. At the end of the war, this levy was also eliminated. In 1895, the Supreme Court released a ruling deeming income taxation as unconstitutional.
Currently, a significant cut on collected levies are allocated for government administration. This is used for the expenses in government operations. Without the taxes, federal offices may be unable to provide public services, such as promoting national policies and creating laws. This is also the source of funding for security and military forces.
Moreover, taxation help redistribute wealth between the taxpayers and those who receive government assistance. The money an individual has to pay is proportional to the amount he makes in a month. Therefore, people with higher incomes are expected to pay higher levies. In turn, these are used to support middle class and low-income citizens in order to provide equal services to the citizens.
Levies being imposed on goods can influence consumer's reception as well. Depending on the government's intentions, the tariff may discourage or encourage public consumption on specific products. For example, cigarettes and alcohols have higher duties to moderate its use. Funds collected from anti-smoking campaigns may also be used to benefit the public health.
Like federal government, state and municipal governments rely heavily on local sales and income taxes to perform their basic functions. Some local governments charge property taxes to help fund for road constructions, public schools and fire departments. Sometimes, lowering the tax rates in a municipality encourage population growth, which may be advantageous to the local economy.
Other localities may have special provisions for taxation. An example is the puerto rico tax law. It was promulgated to help promote the area. It lowers the taxes by not enforcing federal income taxes to its residents. As a result, many wealthy people have decided to move in. After living on the island for 183 days a year, one may become a legal resident.
About the Author:
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Posted by AppleFanatic at 2:48 AM
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