ability to pay principle



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.

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  • 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.

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  • 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.

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

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