The Notion That Equally Situated Individuals Should Be Taxed Equally

question 20

Multiple Choice

The notion that equally situated individuals should be taxed equally is referred to as

• A)horizontal equity.
• B)vertical equity.
• C)the benefits principle.
• D)the Gini principle.

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Definitions:

Switch Break-Even Point

The analysis used to determine the point at which the cost of switching to a different product, service, or system is recouped through subsequent cost savings or benefits.

Variable Cost

Costs that vary directly with the level of production or volume of goods and services provided.

Monthly Interest Rate

The percentage of interest that is charged or earned on a loan, deposit, or investment over a month's period.

Cash Only Credit Policy

A credit policy where a company does not extend credit and only accepts cash payments.