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1) Number of inhabitants
The greater the population the greater is the taxable capacity of the community to contribute towards the expenses of the government.
2) Distribution of wealth
In an economy where wealth is more equally distributed the taxable capacity will be correspondingly reduced.
But where there is a large accumulation of wealth in a few hands the state can raise more money by taxing the higher incomes with the rich.
3) Methods of taxation
A good mixture of the variety of taxes such as direct and indirect taxes is sure to bring in a large yield.
Our tax system is not so diversified and this reduces the taxable capacity.
4) Purpose of taxation
If the purpose of taxation is to promise welfare of the people they will be more willing to contribute towards tax, if the government is intending to raise taxes to fight famine, diseases or spread education, there will be a good yield from the taxes. But if the better part of the public fund is to be spent on the maintenance of the armed forces and the upkeep of a costly service the taxable capacity will be low.
5) Physchology of tax payers
It depends on the people attitude towards a government. A popular government can stimulate the spirit of the people and prepare them for bigger sacrifices. An appeal to patriotism is often the course for success of fiscal measure unless the people are properly approved they may be unwilling to contribute to tax.
Wilfykil answered the question on February 13, 2019 at 08:11