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1 May, 21:00

Which of the following is an example of a tax based on the benefits principle?

a. An income tax

b. A lump-sum tax assessed on household in town to finance the construction of soccer fields

c. A gasoline tax imposed by a city to be used to upgrade facilities local high school

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Answers (1)
  1. 1 May, 23:43
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    The correct option based on the benefits principle will be option b & c.

    Explanation:

    According to taxes based on the benefits principle, the households or users are willing to pay a tax for the benefits received. In that question, options b and c are related to paying taxes and receiving two clear benefits like new soccer fields and upgrading the facilities of local high schools.
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