ABSTRACT
Taxation theory studies are focused on the influence of national taxation on price changes and the difference in various taxation methods such as tax included in the calculated price and tax excluded in the calculated price. In a market economy, the market plays an essential role in allocation of social resources. The impact of taxation on market prices is reflected by separating prices of taxable commodities at both the supply and demand sides. In general, the price paid by consumers rises over the pre-tax price while the price received by the manufacturer falls below the pre-tax price. The price margin thereof is deemed as taxable limit. In the planned economy, social resources were allocated by the government rather than by the market. The government did it by setting planned prices under unified management, which was steady and unchangeable with the changing supply-demand relation on the market.
