Asked by Amane gebiraye on Apr 29, 2024
Verified
Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in. This charge is most like
A) an excise tax that conforms to the benefits principle.
B) an excise tax that violates the benefits principle.
C) a lump-sum tax that conforms to the benefits principle.
D) a lump-sum tax that violates the benefits principle.
Lump-Sum Tax
A tax that is a fixed amount, not varying with the taxpayer’s income level or expenditure, making it independent of the taxpayer’s behavior.
Excise Tax
An excise tax is a tax charged on specific goods and services, such as gasoline, cigarettes, and alcohol, typically to discourage their use or generate revenue.
Benefits Principle
A taxation theory that suggests taxes should be levied according to the benefits received by the taxpayer from government services.
- Recognize the various forms of taxes and their distinctive features.
- Acknowledge the underlying theories of tax policy, such as the ability-to-pay principle and the benefits principle.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
D
Explanation :
A lump-sum tax is a fixed amount paid by all taxpayers, regardless of their behavior or economic status. Charging all students the same activity fee regardless of how many activities they engage in does not align with the benefits principle, which suggests that people should pay taxes based on the benefits they receive. Since students who participate in more activities benefit more but do not pay more, this fee violates the benefits principle.
Learning Objectives
- Recognize the various forms of taxes and their distinctive features.
- Acknowledge the underlying theories of tax policy, such as the ability-to-pay principle and the benefits principle.