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.

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Definitions:

Security Agreement

A formal document granting a creditor a security interest in an identified asset or property, used as collateral for a loan.

Conflicting Security Interests

A situation where multiple parties claim a security interest in the same collateral, potentially leading to disputes over priority and rights.

Unperfected

A term used in law to describe a security interest or claim that has not been formally established or completed according to legal requirements.

Priority

The status of being given more importance or attention before other things.