Which of the following is an example of a tax following the benefits principle?
i.sales taxes on gasoline are used to fund road maintenance projects
ii.federal income tax used to fund food stamps for poorer households
iii.property taxes used to finance public education

Question

Quizplus · Accepted Answer

The benefits principle states that those who benefit from government services and programs should pay for them through taxes. Sales taxes on gasoline used to fund road maintenance projects is an example of this principle because those who use roads the most (and therefore benefit from their maintenance) are likely to be those who drive and purchase gasoline. Federal income tax used to fund food stamps and property taxes used to finance public education do not directly follow the benefits principle as they do not correlate with the specific individuals who benefit from these programs.

Which of the Following Is an Example of a Tax