Which of the Following Taxes Best Illustrate the Ability-To-Pay Principle

question 12

Multiple Choice

Which of the following taxes best illustrate the ability-to-pay principle of tax fairness?

• A) Roads and highways are built and maintained through a tax on gasoline.
• B) The local library is funded through a flat $10 tax levied on all homeowners.
• C) A sales tax on food pays for local police and fire protection.
• D) The WIC program provides food to low income mothers and is funded through the progressive federal income tax.
• E) State parks are maintained through the state lottery.

---

Definitions:

Process Operations

A type of operation concerned with transforming inputs into outputs through a continuous or quasi-continuous production process.

Identical Products

Goods that are exactly the same in every feature, often used in industries where standardization is vital.

Beginning Inventory

The value of all the inventory held by a business at the start of an accounting period.

Equivalent Units

A concept used in cost accounting to standardize heterogeneous units of production, making them quantitatively comparable.