The ability-to-pay concept is fundamental to the income tax structure. Constructs used to implement this concept include
I.Deductions
II.Progressive tax rates
III.Exclusions
IV.Business losses

Question

The ability-to-pay concept is fundamental to the income tax structure. Constructs used to implement this concept include
I.Deductions
II.Progressive tax rates
III.Exclusions
IV.Business losses
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Quizplus · Accepted Answer

The ability-to-pay concept is about the idea that the tax liability should be based on a taxpayer's level of income or ability to pay. Deductions, progressive tax rates, and business losses are all constructs used in the income tax structure to implement this concept. Exclusions can also be used to ensure that certain types of income are not counted as taxable income, which can also help to implement the ability-to-pay concept. Therefore, statements I, II, and IV are correct, making option C the best choice.

The Ability-To-Pay Concept Is Fundamental to the Income Tax Structure