General Knowledge - Indian Economy - Discussion
Discussion Forum : Indian Economy - Indian Economy (Q.No. 14)
14.
On which one of the followings is the benefits received principle of taxation to achieve optimality bases?
Discussion:
11 comments Page 2 of 2.
Merlin AI said:
6 months ago
Here's a breakdown of the concept:
Core Idea: The benefits-received principle suggests that those who benefit most from government services should pay more for them. This is akin to paying for what you get.
Optimality: In this context, optimality means achieving an efficient level of public goods provision. If people pay directly for the benefits they receive, the amount of public goods provided can align better with what people want and are willing to pay.
Examples:
Fuel taxes: These taxes are used to fund road maintenance, aligning the cost with those who use the roads.
Hence, the answer here is D) Ability to pay for the benefit.
Core Idea: The benefits-received principle suggests that those who benefit most from government services should pay more for them. This is akin to paying for what you get.
Optimality: In this context, optimality means achieving an efficient level of public goods provision. If people pay directly for the benefits they receive, the amount of public goods provided can align better with what people want and are willing to pay.
Examples:
Fuel taxes: These taxes are used to fund road maintenance, aligning the cost with those who use the roads.
Hence, the answer here is D) Ability to pay for the benefit.
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