Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 12 - Part IV - The Design of the Tax System - Problems and Applications - Page 255: 9

Answer

a) Benefits principle b) Ability to pay principle c) Benefits principle

Work Step by Step

a) The visitors pay an entry fee, similar to those paid for entrance to an amusement park. This means the national park is similar to an amusement park. b) The real estate taxes paid are an equal sacrifice to all real estate owners. The ability to pay principle states taxes should be levied on someone's ability to pay. c) The tax collected is to improve the facilities used by the airplanes, so people pay for the benefits they receive.
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