Eron, L. D. (1982). The principles of taxation, that is, the appropriate criteria to be employed in the development and evaluation of the tax structure, have received attention from the days of Adam Smith. Ibn Khaldun is again the first economist, with economic surplus at hand, who has given a biological interpretation of the rise and fall of the nations. When we are hungry, for example, our need for food has been energized. Theory # 1. Theory of Optimal Taxation (e.g., broad base, low rate, tax less-elastic activities) I could go on, but you get the idea. In other words, taxation policy has some non-revenue objectives. The Great Man Theory: Thomas Carlyle proposed the Great Man Theory in the 1840s, and it merely believes that leadership is an inherent trait of a person who is destined to become a great leader by birth and they prove themselves when the great need arises. There are two types of tax in india i.e. as well, and thus inseparable from the theory of the firm. A common thread through all of them is that people have a variety of needs. Companies that are quoted on a stock market such as the London Stock Exchange are often extremely complex and require a substantial investment in equity to fund them, i.e. The theories presented in this section focus on the importance of human needs. Twitter LinkedIn Email. It is based on the false assumption that there are successive infinitive transactions. Taxation in India is rooted from the period of Manu Smriti and Arthasastra. It is difficult to fit into one neat theory because of the problem of definition; secondly any theory of FDI is almost inevitably a theory of MNCs. Google Scholar. From a practical viewpoint, it then seems natural to expect that these frictions should also affect equi-librium taxes and what types of tax structures are feasible. But it is not the only goal. Relative Income Theory of Consumption 2. Wagner’s Hypothesis: Adolf Wagner a noted German political economist (1835-1917) pro­pounded an empirical law to analyses and explains the trend in the growth of public expenditure. According to this theory, any tax is shifted automatically in the economic system ad infinitum such that every person in the economy bears the burden of the tax. In L. D. Eron (Ed. Finance Act: Every year Finance Minister of Government of India presents the budget to the parliament. Despite ‘second best’ problems, it is generally accepted that governments should promote competition as far as possible. Parent—child interaction, television violence and aggression of children. Share. Psychology Reports, 9, 292–334. Use of theory in developing a design. According to theory, as the demand for a newly created product grows, the home country starts exporting it to other nations. Walter’s Model 3. Eron, L. D. (1961). Theory of Eclecticism: Each one of the above six ideal-type of social theories of globalisation highlights certain forces that contribute to its growth. Modigliani-Miller (M-M) Hypothesis: Modigliani-Miller hypothesis provides the irrelevance concept of dividend in a comprehensive manner. benefit from debt tax shields. In other words, some people are born to become leaders and leadership is a heroic act. The theory argues that the more debt is, the more a firm’s value is created. For example, because imported products are easier to tax than domestic output, import duties were among the earliest taxes. Modigliani-Miller (M-M) Hypothesis 2. Google Scholar. In classical economics, the theory of firms is based on the assumption that they will seek profit maximisation. Relating to theory, it increases its ability to solve other problems in different times and different places. In other words, the actual cost of debt is less than the nominal cost of debt due to tax benefits. Definition of Behavioural Theories of the Firm: An examination of the inner motives and direction of firms, using a range of models and different assumptions about those who work in a firm. Production Cycle Theory of Vernon Production cycle theory developed by Vernon in 1966 was used to explain certain types of foreign direct investment made by U.S. companies in Western Europe after the Second World War in the manufacturing industry. Product Life Cycle Theory; In the 1970s, Raymond Vernon introduced the notion of using a product’s life cycle to explain global trade patterns, in the field of marketing. In fact, different writers have formulated the different theories, at different times, relating to the equitable distribution of the burden of taxation among the people. 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