The Idea of Horizontal Equity in Taxation Implies That

question 156

Multiple Choice

The idea of horizontal equity in taxation implies that

• A)equally situated individuals should be taxed equally.
• B)unequally situated individuals should be taxed unequally.
• C)benefits should be given first to those individuals who need them most.
• D)the greatest tax burden should be borne by the wealthiest individuals.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Income

The financial gain or money received by an individual or entity, typically through wages, investments, or business operations.

Normal Goods

Goods for which demand increases as the income of the consumer increases.

Current Consumption

The portion of income or wealth that is spent on goods and services in the present, as opposed to saving for future expenditure.