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:

Whistle-Blowers

Individuals who expose illicit activities, unethical behavior, or legal violations within their organization to the public or authorities.

Provision

Provision is the act of supplying or making available goods, services, or funds needed for a specific purpose, or the items supplied themselves.

Governing Boards

Bodies that oversee the strategic direction, accountability, and major policies of an organization, often comprising members elected or appointed to serve.

Ultimate Responsibility

The highest level of accountability, often resting with top managers or leaders, for the outcomes and decisions of an organization or project.