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Investments glossary

Ability-To-Pay Taxation


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Success and failure are both difficult to endure. Along with success come drugs, divorce, fornication, bullying, travel, meditation, medication, depression, neurosis and suicide. With failure comes failure.

— Joseph Heller

Ability-to-pay taxation is a progressive taxation principle that maintains that taxes should be levied according to a taxpayer’s ability to pay. This progressive taxation approach places an increased tax burden on individuals, partnerships, companies, corporations, trusts, and certain estates with higher incomes.

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