Which of the Following Taxes Is Based on the Ability-To-Pay

question 201

Multiple Choice

Which of the following taxes is based on the ability-to-pay principle?

• A)tolls on a bridge
• B)income taxes
• C)gasoline excise taxes
• D)property taxes
• E)user fees that collect the same amount from each person

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Definitions:

Present Value

The present valuation of a future financial sum or sequences of cash inflows, based on a specified rate of return.

Compounded Semi-annually

The process where interest is added to the principal of an investment or loan twice a year, resulting in interest earning interest.

RRSP

Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, aimed at retirement planning.

Month-end Contributions

Payments or deposits made into a particular account or for a specific purpose at the end of a month.