Advanced Placement Microeconomics Chapter 31: Public Choice Theory & Taxation – Part II (Pgs. 650-660) Apportioning the Tax Burden: I Benefits Received vs. Ability-To-Pay Benefits Received Principle of taxation asserts that households and business should purchase the goods and services of government in the same way they buy other commodities. Those who benefit from the government’s goods and services should pay the taxes necessary to finance them. Ex.) If Talley drove on Route 287 to work everyday, she …showed first 75 words of 330 total…

…showed last 75 words of 330 total…tax may or may not take a larger absolute amount of income as income increases. Ex.) State Sales Tax Proportional Taxes – the average rate remains the same regardless of size of income. Most taxes are either progressive or regressive; there are not that many proportional. This is since many taxes such as the Sales Taxes that seem to be proportional are truly regressive · Examples of Progressive, Proportional and Regressive Taxes can be found on pgs. 651 & 652