If revenue from a cigarette tax is used to pay for healthcare for people with lung cancer, the cigarette tax may be justified on the basis of
A)the benefits principle.
B)the ability-to-pay principle.
C)vertical equity.
D)horizontal equity.

Question

Quizplus · Accepted Answer

The benefits principle holds that those who benefit from a particular government program should bear the cost of it. In this case, cigarette smokers who are at risk for lung cancer would benefit from the healthcare funding, so it is justifiable for them to bear the cost through a cigarette tax.

If Revenue from a Cigarette Tax Is Used to Pay