Vertical Equity States That Taxpayers with a Greater Ability to Pay

question 123

Multiple Choice

Vertical equity states that taxpayers with a greater ability to pay taxes should

• A)contribute a decreasing proportion of each increment in income to taxes.
• B)contribute a larger amount than those with a lesser ability to pay.
• C)be less subject to administrative burdens of a tax.
• D)be less subject to tax distortions that lead to deadweight losses.

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Definitions:

Burial Insurance

A type of life insurance policy designed to cover funeral and burial costs, easing the financial burden on surviving family members.

Unsought Product

Products that consumers do not actively seek out to purchase, often requiring significant marketing efforts to sell, such as insurance policies.

Snow Shovel

A tool designed specifically for removing snow from surfaces, typically featuring a broad and flat blade.

Unsought Product

Goods that consumers do not normally think of buying or do not know about, which require significant marketing efforts.