Adam Smith noted that when public expenditures are undertake for the general benefit of everyone in a society then _____.
A)there is considerable conflict between the benefit principle and the ability-to-pay principle
B)there is no conflict between the benefit principle and the ability-to-pay principle
C)the benefit principle provides little guide to tax policy
D)the ability-to-pay principle provides little guide to tax policy

Question

Quizplus · Accepted Answer

According to Adam Smith, when public expenditures are for the general benefit of everyone in a society, there is no conflict between the benefit principle (where individuals who benefit from public goods should bear the cost) and the ability-to-pay principle (where individuals should contribute based on their ability to pay). This is because everyone benefits equally and therefore, everyone should contribute equally.

Adam Smith Noted That When Public Expenditures Are Undertake for the General