Question

Excessive alcohol consumption can lead to liver failure, as well as deterioration of other organs. Suppose the government has opened several public clinics that try to help alcoholics reduce their alcoholic consumption. Now the government is trying to decide how to fund these clinics. One suggestion is to raise the funds for the public clinics with a liquor tax. This tax follows:
A. The benefits principle of tax fairness.
B. Neither the ability-to-pay nor the benefits principle.
C. The ability-to-pay principle.

Answer 1

Answer:

C. The ability-to-pay principle.

Explanation:

According to my research on different tax methods, I can say that based on the information provided within the question this tax follows the ability-to-pay principle. This principle states that taxes should be levied according to a taxpayer's ability to pay. Since the tax in this situation is being placed on liquor, which is not a necessity, then it can be said that the buyer has the ability to pay the tax.

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