ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The benefit principle holds that people should be taxed in proportion to the benefits they receive from goods and services provided by the government. This principle is based on the feeling that one should pay for what one gets.

Detailed explanation-2: -These are: (1) the belief that taxes should be based on the individual’s ability to pay, known as the ability-to-pay principle, and (2) the benefit principle, the idea that there should be some equivalence between what the individual pays and the benefits he subsequently receives from governmental activities.

Detailed explanation-3: -According to the benefits received principle, those who receive or benefit from public services should pay for them. People who use a toll road should pay the toll. People who use a park should pay the park fees. Some taxes work this way.

Detailed explanation-4: -Solution(By Examveda Team) On ability to pay for the benefit is the benefits received principle of taxation to achieve optimality bases.

Detailed explanation-5: -1. The principle recognizes that the purpose of taxation is to pay for government services by paying taxes in proportion to the benefits they receive from government spending. 2. Under the benefit principle, taxes are seen as serving a function similar to that of prices in private transactions.