The ability-to-pay principle is often applied to progressive taxation, where the tax rate increases as the taxpayer's income increases. In this system, those who have a higher income and the ability to pay more taxes are taxed at a higher rate than those with lower incomes. The goal is to ensure that the tax burden is fairly distributed, with those who can afford to pay more contributing a larger share of their income to support government spending.

In contrast, regressive taxation imposes a higher burden on lower-income taxpayers relative to their income. Flat taxes, for example, impose the same tax rate on all taxpayers regardless of their income level, making it a regressive tax system.

The ability-to-pay principle is widely recognized as a fair and equitable approach to taxation, and is used by many countries in their tax systems.