The Assertion That People with the Same Ability to Pay

question 28

Multiple Choice

The assertion that people with the same ability to pay taxes should pay the same amount in taxes best represents the idea of

• A) vertical equity.
• B) the benefits principle of tax fairness.
• C) horizontal equity.
• D) the benefits-paid principle of taxation.
• E) the fairness principle of taxation.

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Definitions:

Dividends

Payments made by a corporation to its shareholders, usually in the form of cash or additional shares, from its net profits.

Retained Earnings

The portion of a company's profits not distributed as dividends to shareholders but reinvested in the business.

Dividend

A segment of a corporation's profits given out to its shareholders, typically as cash or more shares.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and equity at a specific point in time.