Ability to Pay (Taxation)

Finance
Ability to Pay
February 16, 2022
Derivatives
Callable Ratchet Corridor
February 16, 2022

A taxation principle which maintains that the amount of taxes should vary with the levels of wealth or income. That is the taxes someone pays should increase as his income increases, and vice versa. For example, the graduated or progressive income tax takes into account a taxpayer’s ability to pay.

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