1/08/18 11 59pm The ability to-pay principle O A. supports zero income taxes and
ID: 1131348 • Letter: 1
Question
1/08/18 11 59pm The ability to-pay principle O A. supports zero income taxes and higher consumption taxes OB. isthe proposition that people should pay taxes equal to the benefits they receive hom public goods and sences O C. involves comparing people along two dimensions: horizontally and vertically O D. proposes that all taxes that create a deadweight loss should be eiminated 11:59pm 11 B. 01/08/18 11:59pm 01/08/18 11:59pm 01/08/18 11:59pm 01/15/18 11:59pm 01/15/18 11:50pm 01/15/18 11 59pm 01/15/18 11 59pm 11.39pm 01/15 10 59pm ASSESs Chapter 19 Our 01/15/18 15 5ppm nuary 2018Explanation / Answer
C.
The correct answer is option c.
The ability to pay principle states that taxes should be levied according to a taxpayer's ability to pay.
This further means to classify people on the basis of their ability to pay. This classification is termed as horizontal and vertical classification. That is the taxpayers with the same ability to pay should pay the same taxes (Horizontal classification), and taxpayers with a greater ability to pay should bear a greater share of the taxes (vertical classification).
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