The allowance of deductions in calculating taxable income and the use of a progressive tax rate structure are a direct application of the

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The Ability to Pay Concept states that individuals should be taxed based on their ability to pay. Allowing deductions based on certain expenses (e.g. medical expenses, charitable donations) helps to account for an individual's ability to pay, as they are not taxed on that portion of their income used for those expenses. A progressive tax rate structure also aligns with this concept, as it ensures that those with higher incomes contribute a greater share of their income to taxes, again based on their ability to pay.

The Allowance of Deductions in Calculating Taxable Income and the Use