Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in. This charge is most like
A)an excise tax that conforms to the benefits principle.
B)an excise tax that violates the benefits principle.
C)a lump-sum tax that conforms to the benefits principle.
D)a lump-sum tax that violates the benefits principle.

Question

Quizplus · Accepted Answer

A lump-sum tax is a fixed amount paid by all taxpayers, regardless of their behavior or economic status. Charging all students the same activity fee regardless of how many activities they engage in does not align with the benefits principle, which suggests that people should pay taxes based on the benefits they receive. Since students who participate in more activities benefit more but do not pay more, this fee violates the benefits principle.

Some Colleges Charge All Students the Same "Activity Fee