THE UNIVERSITY OF WARWICK

SCHOOL OF LAW
TAXATION LAW, POLICY AND PRINCIPLES 2015-2016
Fiscal Concepts and General Principles of Taxation
Reading:
Module text:
Tiley & Loutzenhiser

Revenue
Chapter 1

Law

(7th

ed.,

2012),

Reference:
R.A. & P.B.Musgrave:

Public Finance in Theory and Practice

(latest edition)

General:
Davies:

Principles of Tax Law (7th ed., 2012),

Chapter 1.

Salter, Lee & Snape:

Revenue
Law:
Text
Chapter 1 (pp. 1-13)

Kay & King:

The British Tax System (5th ed.),

Introduction and Chapters 1, 2 & 6.

James & Nobes:

The Economics of
ed.), Chapters 2-6.

Meade Report (1978):

The Structure and Reform

Taxation (pp. 7-27).

and

Materials,

Taxation
of

(latest
Direct

Keisling:

Taxation and Public

Chapters 2 & 3.

Goods

(1992),

Devereux:

The Economics of Tax Policy (1996),

Introduction only.

Institute for Fiscal Studies: Tax by Design The Mirrlees

Review (2011), Chapters 1 & 2
(i.e. the Introduction and The
Economic Approach to Tax Design)
The purpose of the early lectures is to provide some insight
into the fundamental issues (economic, political and social as
well as legal) which are material to taxation. An understanding
of these issues is crucial to an effective and reasoned
analysis of the substantive and technical areas of the law of
taxation
considered
in
the
remainder
of
this
module.
Consideration of such issues, particularly at this stage, must,
of necessity, comprise an overview of the many factors (some of
which involve a high degree of complexity) that impinge upon
and shape a system of taxation and influence tax policy. It
will be possible, however, to return to some of these issues in
greater depth as the module progresses.
The following specific issues will be considered:A.

What is a tax? How is a tax distinguished from other

financial demands that may be made upon a taxpayer?
(See,
Bowler-Smith
and
Ostik,
Towards
a
Classification of the Central London Congestion
Charge as a Tax [2011] BTR 487)

B.

Upon what grounds may raising revenue by taxation be

justified? What alternative means might be used by
government to raise revenue?

C.

What economic theories have influenced the evolution

of fiscal policy? What are the shortcomings of such
theories?

D.

What should be required of a system of taxation? See

Adam Smith's four "canons of taxation":

-

Equity - horizontal and vertical

nation)
Certainty
Convenience to the taxpayer
Economy in administration

(plus

inter-

plus two further "canons":

- Neutrality
- International convenience and competitiveness
See also the pamphlet entitled "Towards a Better Tax
System" published, initially, in May 2000 by the Tax
Faculty of the Institute of Chartered Accountants in
England and Wales (website: www.taxfaculty.co.uk),
the report Tax Matters: Reforming the Tax System
(The Report of the Tax Reform Commission, October
2006; website: www.taxreformcommission.com), which
was commissioned by the Conservative Party, and, more
recently, the policy paper, Tax Principles: From
Adam Smith to Barack Obama, which was published in
April 2009 by the Association of Chartered Certified
Accountants (www.accaglobal.com).
E.

How may taxes be classified? Classifications, which

have been used, include the following:
-

F.

Upon whom are taxes levied?

-

G.

Direct and indirect taxes

Taxation of income, capital and expenditure
Specific/ad valorem
Progressive, proportional and regressive taxes

Individuals
Companies
Associations (unincorporated)
Multinationals

How is tax collected

administered?

and

how

is

tax

system

David Salter
Sept. 2015