Answer to Question #113482 in Macroeconomics for Ayanda

Question

Peter drives a new BMW and pays R20 toll at the Robme toll road plaza. Lizzy drives a battered VW Beetle and also pays R20. Peter earns R50000 a month and Lizzy earns R20000 a month. Which of the following statements is/are correct? The toll fee is

a) unfair according to the horizontal ability-to-pay principle
b) progressive with respect to the unit of taxation (i.e number of cars)
c) fair in terms of the benefit principle of taxation
d) proportional with respect to the monetary value of the tax base.

Answer 1

Correct answers: a & c