A Principle That Suggests That People with More Income or Wealth

question 96

Multiple Choice

A principle that suggests that people with more income or wealth should pay more taxes is the:

• A) ability-to-pay principle.
• B) regressive tax principle.
• C) progressive tax principle.
• D) benefits-received principle.

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Definitions:

Tax Incidence

The ultimate distribution of a tax burden.

Distribution

The process of making a product or service available for use or consumption by a consumer or business user.

Tax Shifting

Occurs when households can alter their behavior and do something to avoid paying a tax.

Avoid Paying

Strategies or actions taken to minimize or evade expenses, taxes, or other financial obligations.