Topic 11 Notecards.docx - Three Principles of Taxation Sin...

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Three Principles of Taxation Ability to pay Benefits Principle Sin Tax Sin Tax Principle A tax levied to discourage consumption. Alcohol or cigarettes Ability to Pay Principle Is levied based on how much income a person or corporation makes. The higher the income bracket a person is in, will result in a higher the rate of tax. Progressive income tax Basic Economic Maxim Political considerations always win out over economic considerations Benefits Principle A tax levied based on how much benefit a person or corporation gets from an item. The sales tax on gas Three Types of Taxes Progressive Regressive Proportional
Progressive Tax A tax where the Marginal Rate of

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