Ability to pay is a principle in taxation that speaks about tax
fairness. According to this principle, taxes must vary according
to the amount of wealth, or amounts of income earned by
individuals. Hence, individuals who earn income in different
amounts must be taxed at different rates. Individuals who earn
more income must pay more tax because they have the ability to
pay more and it is not because they use more government goods
and services that they are taxed higher. The principle of
ability to pay is applied in cases of progressive taxation.