Comparison Between The US And Netherlands

Introduction:

This essay presents a comparison between two legal systems; the United States (hereinafter US) and the Netherlands (hereinafter NL), and their approaches to income tax.

The NL a is civil law country and it is part of the European Union (EU). However, in short, the direct taxation, consequently income tax, remains the sole responsibility of member states. The NL can be placed within the framework of a parliamentary representative democracy and a decentralized unitary state. The NL is governed as a single power in which the central government is supreme and any administrative divisions exercise only the powers that the central government chooses to delegate.

In contrast, the US is a common law country and is a federal republic

In addition, it has aspects of a scheduler tax system, because it’s another separate source of income with its own regime. The income is levied on the taxable income of an individual, which is assessed each year. Capital gains are not taxed separately but treated as taxable income. Individuals who are residents of NL must tax on their worldwide income.

The US is characterized by a global definition of income that is a comprehensive system for taxing capital gain. It is a classical corporate tax system, and has a single law for corporate and individual income tax that has a world-wide jurisdictional approach based on citizenship and residence. This approach uses foreign a tax credit system for granting relief form internal double taxation. Moreover, the US income tax system is considered progressive, as is that of the

This provision says that only the legislature has the power to lay taxes. Any tax may be unconstitutional if it does not provide for the common defence and general welfare. Furthermore, a tax should not violate any other constitutional rights or interests, e.g.: property or equal protection rights. The 16th amendment allows income taxation without apportionment and specifically provides that congress has the power to collect taxes on income from whatever source desired. Article 1, Section 7, Clause 1 is the ‘origination clause’ that requires tax revenue bills to originate in the House of Representatives. The 5th and 14th amendments establish limits on federal and state taxing authority (e.g.: prohibit deprivation of property without due process and guarantee equal protection of the law.

Consequently, the congress has the power to enact tax laws as the framework for the federal tax system. The United States Code (USC) covers tax law under Title 26 Internal Revenue Code (IRC). The IRC provides the foundation for all federal tax authorities and covers income tax. However, it doesn’t include everything. The Federal Insurance Contribution Act (FICA) is calculated based on income. Moreover, the states theoretically have full taxing power, except for customs duties. Therefore, they can also provide references for taxation. Moreover, within