If Vertical Equity Is Being Used as the Basis of a Tax

question 147

Multiple Choice

If vertical equity is being used as the basis of a tax, then taxpayers with a lesser ability to pay should:

• A)contribute a smaller amount
• B)contribute a larger amount
• C)be less subject to administrative burdens of a tax
• D)contribute the same amount as taxpayers with a greater ability to pay

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Definitions:

Securities Act of 1933

A U.S. federal law that regulates the sale of securities to the public, requiring transparency and disclosure to protect investors.

Liability

The state of being legally responsible for something, especially in terms of owing something to someone or for actions causing harm or damage.

Tender Offer

A public offer made by an entity or individual to purchase a substantial portion of a company’s shares or bonds at a specified price and within a specific time.

Securities Exchange Act

U.S. legislation that regulates the trading of securities to protect investors and maintain fair and efficient markets.