Suppose Fairness Is Defined as Those with the Highest Incomes

question 8

Multiple Choice

Suppose fairness is defined as those with the highest incomes can afford to pay a greater proportion of their income in taxes. Then which of the following taxation systems would be consistent with this notion of fairness?

• A) A true flax tax.
• B) A flat sales tax on consumption purchases.
• C) A progressive tax on income.
• D) A fixed federal tax of $5,000 that everyone pays regardless of income status.

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Definitions:

Inequity

A condition under which fair treatment is not received or given, often leading to disparities among individuals or groups.

Inequality

The state of not being equal, especially in status, rights, and opportunities.

Commons Dilemma

A situation in which individuals' short-term selfish interests are at odds with long-term group benefits and social sustainability.

Prisoner's Dilemma

A situation in game theory where two individuals acting in their own self-interest pursue a course of action that does not result in the ideal outcome for either of them.