The Benefits Principle of Taxation Can Be Used to Argue

question 356

Multiple Choice

The benefits principle of taxation can be used to argue that wealthy citizens should pay higher taxes than poorer ones on the basis that

• A)police services are more frequently used in poor neighborhoods.
• B)the wealthy benefit more from services provided by government than the poor.
• C)the poor are more active in political processes.
• D)the poor receive welfare payments.

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Definitions:

Residential Telephone Service

A service provided to homes that allows residents to make and receive telephone calls.

Monthly Fee

A recurring charge that consumers or businesses must pay for access to a product or service, typically charged on a monthly basis.

Intertemporal Price Discrimination

A pricing strategy where a seller varies the price of a good or service over time to maximize profits from different consumer willingness to pay.

Marginal Cost

The boost in aggregate expenses associated with producing an extra unit of a good or service.