Skip to main content

Economic Literacy: "Ability To Pay Principle"

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.

Popular posts from this blog

Factors of Production and their Rewards

Type Definition Reward Land Labour Capital Enterprise All natural resources The physical and mental works of people All man made tools and machines All managers and organizers Rent Salary/Wage Interest Profit/Loss

Factors Affecting Geographical Mobility of Labour

Geographical Mobility of Labour refers to the movement of workers from one place to another place.  It depends upon; ·     cost of housing ·     cost of relocation ·     availability of social amenities ·     family ties etc

Factors Affecting Occupational Mobility of Labour

Occupational Mobility of Labour refers to the movement of workers from one occupation to another occupation. It depends upon; ·     the facilities for training and retraining ·     wage differentials ·     job security ·     future prospects ·     fringe benefits etc