The rationale for ability-to-pay taxation and the contention that those with large incomes should pay more taxes both absolutely and relatively is that:
A) high-income receivers are generally in a better position to shift taxes than are low-income receivers.
B) the transfer system is regressive and it is therefore essential to have an offsetting progressive tax structure.
C) rational consumers spend their first dollars of income on the most urgently desired goods and successive dollars on less essential goods.
D) taxes should be paid for financing public goods in direct proportion to the satisfaction an individual derives from those goods.

Question

Quizplus · Accepted Answer

The ability-to-pay principle suggests that those with higher incomes can afford to pay more in taxes because they have already satisfied their most urgent needs with their initial income, and additional income is spent on less essential goods.

The Rationale for Ability-To-Pay Taxation and the Contention That Those