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:

FASB

The Financial Accounting Standards Board (FASB) is a private, non-profit organization standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest.

Temporary Difference

A difference that arises between the tax bases of assets or liabilities and their carrying amount in the financial statements, which will result in taxable or deductible amounts in future years.

Bad Debts Expense

The cost to a company resulting from the inability to collect a receivable because a customer is unable to fulfill their payment obligations.

Product Warranty Costs

Expenses incurred by a company due to repairing or replacing products that fail to perform satisfactorily within a given warranty period.