Question

ADAM SMITH'S FIRST PRINCIPLE OF SOUND TAXATION STATES THAT TAXPAYERS SHOULD CONTRIBUTE ACCORDING TO THEIR ABILITY TO PAY. BASED ON THIS, WHICH TAX WOULD SMITH MOST LIKELY FIND TO BE THE MOST FAIR a STATE SALES TAX b FEDERAL INCOME TAX c DOCTOR'S LICENSE FEES d FEE AT TOLL ROADS

Answer 1

Answer: FEDERAL INCOME TAX

Explanation:

The most likely tax that follows the principle that states that people should pay based on their ability is the federal income tax. This tax is progressive as the high income earners pay a higher percentage as tax when compared to he low income earners.

The sales tax and doctors license fees aren't progressive, as the rich and the poor all pay same amount. This doesn't align with the principle.