Which of the following is an example of a tax following the benefits principle?
i.sales taxes on gasoline 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 a public service or good should pay for it through taxes. Sales taxes on gasoline used to fund road maintenance directly follows this principle since those who use roads (and therefore gasoline) are the ones who benefit from their maintenance. However, 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 are not tied to a specific benefit received by the taxpayer.

Which of the Following Is an Example of a Tax