The principle that taxes should be levied based on the taxpayer's ability to pay, suggesting that as income or wealth increases, the marginal utility decreases, allowing for higher tax rates on higher income tiers.
A wealth tax is an annual levy on the total value of personal assets, which may include stocks, bonds, real estate, and other types of property. This tax is designed to address wealth inequality by taxing individuals based on their net worth rather than their income.
