Economic Literacy: "Ability To Pay Principle"

Monday, January 02, 2017

Ability to pay is an economic principle stating that the amount of tax an individual pays should be dependent on the level of burden the tax will create relative to the wealth of the individual.

The ability to pay principle suggests that the real amount of tax paid is not the only factor that has to be considered, and that other issues such as ability to pay should also factor into a tax system.

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