meaning of ability to pay principle

ability to pay principle meaning in Law Dictionary

principle in economics that people with an increase of wealth should spend higher fees. This balances people that have a lesser earnings who cannot afford to spend as much.

ability to pay principle meaning in Business Dictionary

Economics idea that people that have more sources (wealth), or make higher earnings, should pay even more taxes. The ability to spend taxes (particularly income-tax or income tax on luxury goods) are utilized as ways income redistribution. Also known as ability to pay tax.