Use of an Equity Criterion in Judging a Tax Would

question 38

Multiple Choice

Use of an equity criterion in judging a tax would entail

• A)determining the degree to which the burden of the tax is distributed in accordance with ability to pay.
• B)ensuring that all incomes are taxed at the same rate.
• C)determining the degree to which the tax yield is responsive to changes in economic conditions.
• D)abandoning the income tax, as it cannot be adapted to meet this criterion.

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Definitions:

Corporations

Legal entities that are separate from their owners, providing limited liability protection, and able to enter into contracts, sue, and be sued.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Directors

Directors are individuals elected by the shareholders of a corporation to oversee and direct the corporation's affairs and make significant business decisions.

Shareholder's Right

The entitlements and privileges, such as voting and profit sharing, accorded to individuals or entities owning shares in a corporation.