Explanation Government spending is the expenditures made by the government for various purposes in the economy. Government expenditures are made out of the government revenue. The taxes are the important source of revenue for the government. The taxes are the unilateral payments made by the people towards the government on various accounts such as for the income received, for the profession, for the property owned, for the business owned, and so on. Option (c): The income tax is imposed on the annual income of the individuals in the economy. The income has been divided into different slabs and the basic slab is at the $15,000 per annum. This is the minimum required level to meet the yearly expenses of the individual and the individual earning below $15,000 has no ability to pay taxes and hence, they are exempted from income tax payments. Thus, this classification indicates the ability to pay principle of the income tax and hence, option 'c' is the correct answer. Option (a): The benefit received principle of taxation indicates that the tax is levied from those who receive the benefits...

The taxation principle.

MACROECONOMICS FOR TODAY

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ISBN: 9781337613057

Author: Tucker

Publisher: CENGAGE L

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Chapter 12, Problem 18SQ

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The taxation principle.

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