Which of the Following Best Describes Vertical Equity

question 8

Multiple Choice

Which of the following best describes vertical equity?

• A)All taxpayers should pay some taxes on their incomes
• B)As income increases, taxes should increase
• C)Persons with equal incomes should pay the same amount of taxes
• D)A person with capital gains should pay less tax than a person with the same amount of salary income

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Definitions:

Normal Debit Balance

The expected balance type of an account that is increased by a debit, typical for assets, expenses, and losses.

Withdrawals

Money taken out from a bank account, or the act of taking out funds from a business by its owners for personal use.

Expenses

Outflows or other uses of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major operations.

Formal Account

An organized financial record of transactions over a period for an individual, company, or entity, maintained in a structured format.