The ability-to-pay principle says that:

Question

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The ability-to-pay principle states that those with greater ability to pay should contribute more to taxes. This is based on the idea that those with higher incomes have a greater capacity to pay taxes without sacrificing as much of their overall well-being. Therefore, the principle suggests that taxes should be levied in a progressive manner, such that those with higher incomes pay a higher percentage of their income in taxes compared to those with lower incomes. Option A is incorrect because the measure of value principle links the amount of tax paid to the value of the property or goods being taxed. Option B is incorrect because the benefit principle suggests that those who benefit from public spending should contribute more towards taxes. Option D is incorrect because the principle of benefits received suggests that taxes should be levied in proportion to the benefits individuals receive from public spending.

The Ability-To-Pay Principle Says That