For which item(s)is/are the ability-to-pay principle a good justification? I.the welfare state
II.government transfers
III.the income tax structure
IV.Pigouvian subsidies

Question

Quizplus · Accepted Answer

The ability-to-pay principle is a justification for the welfare state, government transfers, and the income tax structure, as these are based on individuals' capacity to pay, ensuring that those with higher incomes contribute more to support public services and redistribution. Pigouvian subsidies, however, are related to correcting market externalities, not the ability-to-pay principle.

For Which Item(s)is/are the Ability-To-Pay Principle a Good Justification? I