Horizontal Equity Incorporates the Notion That

question 21

Multiple Choice

Horizontal equity incorporates the notion that

• A) those earning higher incomes should pay more in taxes.
• B) those earning equal incomes should pay the same in taxes.
• C) taxes paid should be unassociated with income levels.
• D) there should be no excess burden created by a tax.

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Definitions:

Involuntary Bankruptcy

A legal procedure where creditors petition a court to declare a debtor bankrupt, without the debtor’s consent, in order to recoup some of the owed money.

Chapter 13

A type of bankruptcy filing in the United States that allows individuals earning a regular income to develop a plan to repay all or part of their debts over time.

Steady Income

A consistent flow of money earned or received over time, usually through employment, investments, or other reliable sources.

Mortgage Loan

A loan secured by collateral of some specified real estate property which the borrower is obliged to pay back with a predetermined set of payments.