Answer: The answer is True. The Federal Income Tax is based on the philosophy of "ability to pay" tax principle.
Explanation:
Ability to pay taxation is a progressive taxation principle in which taxes are levied on tax payers based on their level of income. What this simply means is that, an individual or organization that earns more is taxed more than an individual or organization that earns less, because it is believed that those who earn more should be able to pay more in taxes.
The Federal income tax is based on this philosophy, in that the tax rates vary, based on the level of income of an individual or organization.
Here is an instance, for the tax year 2019, a 37% tax rate is levied on single income earners who earn above $510,300, while this same rate is levied on married couples filing jointly who earn above $612,350. Also, a rate of %35 is levied on individuals who earn above $210,400, while it is $408,200 for married couples filing jointly.
The tax brackets are: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. An individual's bracket will depend on their taxable income and filing status.