The benefits-received principle of taxation is:
A. The basis for the gasoline tax
B. Easy to apply because benefits received are conveniently measurable
C. Applied in income-redistribution programs
D. The principle behind the income tax system
A. The basis for the gasoline tax
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What can we do to deal with the externalities associated with public goods and common resources?
a) Private markets will lead to an efficient allocation of resources. b) Government intervention can potentially raise economic well-being. c) Private markets will correct for the gain or loss to consumer surplus. d) Government intervention can completely eliminate the free-rider problem.
If expectations are rational,
a. a predictable change in inflation can make the expected inflation rate deviate from the actual rate. b. unemployment can exceed the full-employment rate even in the long run. c. the difference between the actual inflation rate and the expected inflation rate must be a purely random number. d. the inflation rate cannot be reduced without a period of high unemployment because the Phillips curve is downward sloping.