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The benefits-received principle and the ability-to-pay principle refer to alternative theories of ______.

User GRosenberg
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Final answer:

The benefits-received principle and the ability-to-pay principle are alternative theories of taxation based on different approaches to distributing the tax burden.

Step-by-step explanation:

The benefits-received principle and the ability-to-pay principle refer to alternative theories of taxation.

The benefits-received principle suggests that those who benefit from government goods and services should pay taxes in proportion to the amount of benefits they receive. For example, if a local restaurant near an airport benefits from improvements funded by a tax on air travel, they may be expected to pay for that benefit.

On the other hand, the ability-to-pay principle suggests that taxes should be based on a person's ability to pay. This means that individuals with higher incomes would pay more in taxes compared to those with lower incomes. The goal is to achieve a fair distribution of the tax burden based on individuals' financial capacity.

User Anuj Rana
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