Introduction / Context:
The issue is whether agricultural income should be taxed. Strong arguments should align with equity, revenue adequacy, and practicality.
Given Data / Assumptions:
- Agricultural producers range from subsistence farmers to large commercial agribusinesses.
- Public finance seeks fairness (ability to pay) and resource mobilization.
- Targeted exemptions or thresholds can protect vulnerable farmers.
Concept / Approach:
An argument favoring taxation on principle (ability to pay) and resource needs can be strong, especially if paired with progressivity. A blanket “no tax” because some farmers suffer is weaker as a universal policy claim.
Step-by-Step Solution:
I: Weak. Hardship among small farmers is real, but the solution is progressive taxation with exemptions, not a universal exemption forever.II: Strong. When a majority earns agricultural income, broadening the base (with thresholds) augments resources for public goods.III: Strong. Ability-to-pay principle supports taxing high-income farmers to reduce horizontal inequity versus salaried groups.
Verification / Alternative check:
Many tax systems differentiate by income level, offering relief or zero tax to smallholders, while taxing large agricultural profits.
Why Other Options Are Wrong:
Options including I endorse a blanket exemption; “All are strong” overstates I; “None of these” is incorrect.
Common Pitfalls:
Equating protection for small farmers with untaxed status for all agricultural income.
Final Answer:
Only II and III are strong
Discussion & Comments