Final answer:
The ability to pay principle of taxation asserts that people with higher incomes should pay more in taxes. This is true and is implemented through a progressive tax system.
Step-by-step explanation:
The statement that people who have higher incomes should pay a greater share of their income in tax according to the ability to pay principle of taxation is true. This principle is based on the idea that those who are better able to bear the financial burden of taxes should pay more than those with limited financial resources. This is in contrast to the benefit principle of taxation, which suggests that taxes should be paid in proportion to the benefits received from government services. In practice, a progressive tax system is one way in which the ability to pay principle is applied, where the tax rate increases as the taxable income of an individual or entity increases.