The ability-to-pay principle provides a direct connection between taxes and the use of revenue.TrueFalse
Question
The ability-to-pay principle provides a direct connection between taxes and the use of revenue.
True
False
Solution
The statement "The ability-to-pay principle provides a direct connection between taxes and the use of revenue" is False.
Explanation:
The ability-to-pay principle suggests that individuals should pay taxes based on their financial capacity to bear the tax burden, meaning wealthier individuals should pay more taxes than those with lower incomes, regardless of how the tax revenue is used. This principle does not inherently link the amount of tax paid to the specific benefits received from government services or programs, thereby separating the tax contribution from the intended use of that revenue. Instead, it focuses on equity and fairness in the tax system.
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