The Horizontal-Equity Principle of Taxation Is Not Easy to Use

question 15

Multiple Choice

The horizontal-equity principle of taxation is not easy to use in practice because

• A)some people engage in rent seeking to reduce their taxes below the level other people pay.
• B)people can use tax loopholes to reduce their incomes below the incomes of other taxpayers.
• C)different people receive different levels of government benefits even if their incomes are the same.
• D)it is difficult to determine whether people are in the same economic situation.

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Definitions:

Autotroph

Producer. Organism that makes its own food using energy from the environment and carbon from inorganic molecules such as carbon dioxide.

Chemical Energy

A form of potential energy stored in the bonds of chemical compounds, released during chemical reactions.

Photorespiration

A process in plant metabolism where oxygen is consumed and carbon dioxide is released, typically reducing the efficiency of photosynthesis.

C4 Plants

Plants that utilize the C4 carbon fixation pathway, enabling them to photosynthesize more efficiently in high light and temperature conditions than C3 plants.