Which of the Following Statements About Vertical Equity Is False

question 38

Multiple Choice

Which of the following statements about vertical equity is false?

• A) Vertical equity focuses on a fair rate structure instead of a fair measurement of the tax base.
• B) If persons with greater ability to pay owe more tax than persons with lesser ability to pay, the tax is vertically equitable.
• C) A tax with a single percentage rate is not vertically equitable.
• D) None of these choices are false.

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Definitions:

Contribution Margin

It refers to the amount of revenue remaining after deducting variable costs, which can contribute to covering fixed costs and generating profit.

Operations

The day-to-day activities involved in running a business, focusing on creating and delivering products or services.

Fixed Manufacturing Overhead

Expenses related to production that remain constant, regardless of the production volume, such as maintenance of machinery and property taxes.

Deferred

A term referring to items or expenses that are not recognized immediately but postponed to a future date.