Refer to the Graph Shown

question 7

Multiple Choice

Refer to the graph shown. The poorest 30 percent of the families earn:

• A)2 percent of the income.
• B)5 percent of the income.
• C)9 percent of the income.
• D)15 percent of the income.

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Definitions:

Ability to Pay

The principle suggesting that taxes should be levied according to an individual's or entity's capacity to pay, typically related to income or wealth levels.

Progressive Income Tax

A tax system where the tax rate increases as the taxable income increases, aimed at redistributing income more equitably.

Ability-to-Pay Principle

A taxation principle suggesting that taxes should be levied based on an individual's or entity's ability to pay, often implying higher rates for higher income levels.

Tax Equity

The fairness of a tax system, judged by how evenly or proportionately tax burdens are distributed among different groups of taxpayers.