What is ability to pay?

Ability to pay is an economic principle that states that the amount of tax an individual pays should be dependent on the level of burden the tax will create relative to the wealth of the individual.

What is the ability to pay principle?

The ability-to-pay principle holds that those who have a greater ability to pay taxes—measured by income and wealth—should pay more. One idea behind "ability to pay" is that those who have enjoyed success should be willing to give back a little more to the society that helped make that success possible.

What is an example of the ability-to-pay principle of taxation?

An example of the ability-to-pay principle is as follows: two people are placed within the same tax bracket, with one having children going to school, while the other has none. Both individuals will be required to pay the same tax rates. What is the Ability-to-Pay Principle of Taxation? What is the Ability-to-Pay Principle of Taxation?