BENEFIT THEORY OF TAXATION

2017 NOV II
Q. The Benefit Theory of allocation of the tax burden was given by:
(1) Seligman (2) Lindhal
(3) Dalton (4) Pigou
ANS: (2) The benefit theory of allocation of the tax burden was given by Erik Lindahl. According to this principle, the amount of taxation is fixed by the level of benefits each person receives from the social welfare activities of the government. Those who benefited most are supposed to pay higher taxes than those who get lesser benefits.