ability to pay principle

  

Definition

Economics concept that those who have more resources (wealth), or earn higher incomes, should pay more taxes. The ability to pay taxes (such as income tax or tax on luxury goods) are used as means of income redistribution. Also called ability to pay tax.

Use this term in a sentence

  • The ability to pay principle was not popular in the meeting when it was discussed because it slightly removes the relationship of work and reward from the income generating equation.

    6 people found this helpful    
  • I was making a lot more money now every year and I started to dislike the ability to pay principle because I wanted more money.

    5 people found this helpful    
  • The Democratic congressman in our state recently proposed a bill increasing taxes on the wealthy citing the ability to pay principle.

    8 people found this helpful    
Show more usage examples...

Related Videos




http://www.businessdictionary.com/definition/ability-to-pay-principle.html

Have a question about this term? Ask for help in the
Community
Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z