Define the benefit principle. List two real world taxes that have the

Define the benefit principle. List two real world taxes that have the features of a tax based on the benefit principle. Why can’t the benefit principle be the sole principle of taxation?

What will be an ideal response?

ANSWER

The benefit principle states that the people who benefit from the government’s expenditures should be the ones who pay for them. Two real world examples of taxes that have features based on the benefit principle are entry fees for public parks and tolls for government turnpikes. The benefit principle is difficult to apply in all situations because it is often difficult to determine who is actually benefiting from a government activity and it is often in conflict with other goals such as redistribution.