Who Sets Tax Law? A Comprehensive Guide

Tax laws are the set of regulations that govern how taxes are collected and distributed. The process of creating and enacting tax legislation is complex and involves multiple stakeholders. It begins in the House of Representatives, where a bill is referred to the Ways and Means Committee. Once the members of this committee reach an agreement on the legislation, they draft a bill.

After Congress approves the bill, it goes to the president, who can sign it into law or veto it. Under the Sixteenth Amendment, Congress has the power to collect income taxes. The Internal Revenue Code is the main law that governs taxes in the United States. It is codified as Title 26 of the United States Code. States can also impose and collect their own taxes, including income taxes, sales taxes, and property taxes.

The development of tax legislation as a comprehensive system is a relatively recent phenomenon. One reason for this is that there was no general tax system in any country before the mid-19th century. In traditional agrarian societies, government revenues came from non-tax sources such as taxes, revenues from real domains and land income, or from taxes on various objects such as land taxes, tolls, customs and excise taxes. Income or capital taxes were not considered an ordinary means of government funding; they first appeared as emergency measures. The British income tax system, for example, one of the oldest in the world, originated in the law of 1799 as a temporary means of dealing with the increasing financial burden of the Napoleonic Wars. Another reason for the relatively recent development of tax legislation is that the tax burden and the problem of defining limits to the taxing power of public authority only became substantial with the expansion of the concept of proper sphere of government that has accompanied the increasing intervention of modern states in economic, social, cultural and other matters. A common limitation on taxing power is the requirement that all citizens be treated equally.

This requirement is specified in the U. S. Constitution. A similar provision in other constitutions is that all citizens are equal and that tax privileges cannot be granted.

However, this rule is often violated by pressure groups; it is also difficult to apply and interpret it unambiguously. In countries where local governments are under control of the national government, the central authority can cancel a local tax on grounds that it violates national constitution if it violates rule of uniformity and equality of taxpayers. In addition to previous constitutional, traditional or political limitations, there are no restrictions on taxing power of legislative body. Once enacted by legislature, a tax cannot be judicially restricted. There is no way to launch legal attack against a tax law because it is arbitrary or unfair but application of law must be correct. The Office of Tax Policy produces reports in response to congressional mandate, important tax policy issues or important reports on tax reform.

International tax law deals with problems that arise when an individual or company is taxed in several countries. Tax expenses describe income losses attributable to provisions of federal tax laws that allow special exclusion, exemption or deduction of gross income or provide special credit, preferential tax rate or deferral of tax liability. A compromise can be reached between orthodox doctrine of legality of taxes and need in special circumstances to modify texts on taxation almost immediately by modifying text by means of decree or order of executive (treasury) and ratifying it by legislature as soon as possible henceforth. The invasion of executive power in territory reserved for legislature in tax matters is generally explained by need to make tax policy more flexible; urgent amendments may be required due to sudden changes in economic situation changes so sudden that recourse to procedure parliamentarian would take too long. However constitutions some countries may allow executive branch to impose temporary quasi-legislative measures in cases emergency and in certain circumstances executive may be given power to modify provisions within limits established by legislature. Decision-making about merits various types taxes general level taxation specific tax rates for example does not fall within scope tax legislation; it is political process not legal one. Application of tax laws generally regulated by executive branch (government or tax agency). A key focus department is balance efforts promote voluntary compliance cornerstone state's tax system with duty enforce New York's tax laws. In general, tax legislation deals only with legal aspects taxes not with their financial economic or other aspects.

Nation's tax law usually exclusive it although there are similarities common elements laws several countries.

Jacob Macdonnell
Jacob Macdonnell

Incurable zombieaholic. Passionate beer maven. Zombie trailblazer. Hipster-friendly coffee fanatic. Infuriatingly humble foodaholic.