Which of the Following Statements Is Correct

question 21

Multiple Choice

Which of the following statements is correct?

• A)Vertical equity is the idea that taxpayers with similar abilities to pay taxes should pay the same amount.
• B)Horizontal equity is the idea that taxes should be levied on a person according to how well that person can shoulder the burden.
• C)A regressive tax would mean that high-income tax payers pay a larger fraction of their income in taxes than would low-income taxpayers.
• D)A proportional tax would mean that high-income and low-income taxpayers pay the same fraction of income in taxes.

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Definitions:

Interstate Commerce Commission

The first federal agency created in 1887, designed to regulate the railroads and later other modes of transportation, ensuring fair rates and practices.

Census Bureau

A principal agency of the U.S. Federal Statistical System responsible for producing data about the American people and economy, notably through the decennial census.

Labor and Capital

Describes the economic and social relationship between workers (labor) and the owners of businesses (capital).