If Taxes Are Collected on the Basis of Ability-To-Pay and There

question 95

Multiple Choice

If taxes are collected on the basis of ability-to-pay and there are two taxpayers with the same income who also are identical in all other respects,which of the following is correct?

• A) Vertical equity is impossible between these two taxpayers.
• B) Vertical equity exists.
• C) Horizontal equity exists.
• D) The tax must be proportional.
• E) The fair-incidence principle is potentially being violated.

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Definitions:

Degrees of Freedom

The number of values in a final calculation of a statistic that are free to vary.

Number of Treatments (k)

In statistical experiments, refers to the different categories or treatments under consideration.

Number of Observations (n)

The total count of data points or elements in a statistical sample or experimental study.

F-distribution

A probability distribution used mainly in analysis of variance (ANOVA), especially for comparing group variances.