Two Families Who Live in Wawa Have Identical Incomes

question 96

Multiple Choice

Two families who live in Wawa have identical incomes.The Smiths deduct $5000 from their taxable income for child support interest paid during the year,while the Jones family is not eligible for this deduction.What does this situation exemplify

• A)an application of the benefits principle of taxation
• B)a violation of horizontal equity
• C)a violation of vertical equity
• D)an application of egalitarian tax rules

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