Discuss the theory of the ability-to-pay principle
What will be an ideal response?
It is a theory of taxation which holds that citizens should bear tax burdens in line with their ability to pay taxes.
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Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Both individuals will be better off if
A) Tom trades sandwiches in exchange for eggs. B) Jerry trades sandwiches in exchange for eggs. C) they trade, no matter who trades sandwiches and who eggs. D) they don't trade.
When a firm’s AC eventually starts to rise, it is often because
A. executive salaries rise sharply as output rises. B. the ability to manage larger and larger levels of output results in much higher administrative costs. C. marginal cost increases rapidly at higher output levels. D. firm output has started to decline.
The North American Free Trade Agreement is an example of
A) a beggar-thy-neighbor trade policy. B) a preferential trade arrangement. C) a multinational quota system. D) a general agreement on tariffs and trade.
Friedman argued that the Fed could use monetary policy to peg
a. the level of real GDP. b. the growth rate of real GDP. c. the rate of unemployment. d. None of the above is correct.