Direct tax
The unconditional, inexorable aspect of the direct tax was a paramount concern of people in the 18th century seeking to escape tyrannical forms of government and to safeguard individual liberty.
... if he is a manufacturer, will charge upon the price of his goods this rise of wages, together with a profit; so that the final payment of the tax, together with this overcharge, will fall upon the consumer.
Constitutional Convention who dissented from the document sent to the states for ratification, objected over this kind of taxation, and explained: The power of direct taxation applies to every individual ... it cannot be evaded like the objects of imposts or excise, and will be paid, because all that a man hath will he give for his head.
The power of direct taxation will further apply to every individual ... however oppressive, the people will have but this alternative, either to pay the tax, or let their property be taken for all resistance will be vain.
Another advantage of direct taxation is that the government and the taxpayer know the amount they will receive and they pay, even before the collection of the tax.
Indirect taxation however make goods and services more expensive (the burden of the tax is reflected in the prices).
[11] Indeed, taxation is a main tool of the redistributive function of the government identified by Richard Musgrave in his The Theory of Public Finance (1959).
A progressive direct taxation could participate in the reduction of inequalities and correcting difference in living standards among the population.
[11] Another effect of a progressive direct taxation is that such tax structure act as automatic stabilizers when prices are stable.
§ 7201 affirmed by the United States Court of Appeals for the Third Circuit; taxpayer's argument—that because of the Sixteenth Amendment, wages were not taxable—was rejected by the Court; taxpayer's argument that an income tax on wages is required to be apportioned by population also rejected); Perkins v. Commissioner, 746 F.2d 1187, 84-2 U.S. Tax Cas.
§ 61 ruled by the United States Court of Appeals for the Sixth Circuit to be “in full accordance with Congressional authority under the Sixteenth Amendment to the Constitution to impose taxes on income without apportionment among the states”; taxpayer's argument that wages paid for labor are non-taxable was rejected by the Court, and ruled frivolous).
Direct tax is a form of collecting taxes applicable on the general public by the means of their personal income and wealth generated and collected through formal channels and worthy government credentials such as Permanent account number and bank account details.
Section 2(c) of the Central Boards of Revenue Act, 1963 of India defines "direct tax" as follows: Tax policy in the European Union (EU) consists of two components: direct taxation, which remains the sole responsibility of member states, and indirect taxation, which affects free movement of goods and the freedom to provide services.
EU direct taxation covers, regarding companies, the following policies: the common consolidated corporate tax base, the common system of taxation applicable in the case of parent companies and subsidiaries of different member states (to avoid withholding tax when the dividend qualifies for application of the EC Parent-Subsidiary Directive,[23] the financial transaction tax, interest and royalty payments made between associated companies and elimination of double taxation if the payment qualifies for application of the EC Interest and Royalties Directive.
