What is the ability-to-pay principle of taxation? List one strength an

What is the ability-to-pay principle of taxation? List one strength and one weakness of the ability-to-pay principle as a guide to tax policy.

What will be an ideal response?

ANSWER

The ability to pay principle states that individuals should pay taxes in proportion to their ability to pay. A major strength of the ability-to-pay principle is that it is a useful guide when the benefit principle is inapplicable, such as when it is impossible to determine the distribution of benefits from a government program. A weakness of the ability-to-pay principle is that it is often difficult to determine an individual’s ability to pay, making it difficult to apply in the real world.