Taxation of wealth and its appication in Turkey

The basic principle of taxation is acquisition of taxes in proportion with the financial state of the persons. The indications of financial state are revenue, wealth and expenditures. From the historical perspective, it is seen that the most ancient taxes are those depending on wealth. Today, the share of these taxes within the tax revenues has changed and the share of the taxes depending on wealth decreased so that it has almost been abolished. The globalization and international competition on taxation in particular resulted the decrease of the share of the taxes depending on wealth.The taxes depending on wealth are of three types under various names. One of those is the annual taxation of whole of the wealth, another one is taxation of wealth increase, and the third type is taxation of wealth transfers.One of the reasons which would justify the taxation of wealth in our country is the social state, one of the basic principles of the Republic, prescribed in Article 2 of the Constitution. The wealth taxes are not used for financial purposes but used more for social purposes. The wealth taxes have the function of supplementing revenue and expenditure taxes and control. The characters of the wealth taxes in our system can not satisfy these control and supplementing functions. The applicable wealth taxes are only considered as revenue and the fact that they do not achieve the other functions and purposes remain unimportant. Our current system shall be revised in order to achieve all these functions and purposes or a new general permanent wealth tax including all wealth factors shall be introduced.The permanent wealth taxes are of private nature and those in general wealth tax character are not permanent in our system. The fact that there is no general and permanent wealth tax application renders the wealth taxes in our system insufficient to satisfy some of the functions expected from them.