Question:
Vertical equity in taxation holds that
(1) those with equal ability to pay should bear equal tax burden.
(2) those who benefit the most from government services should bear the higher tax burden.
(3) those with greater ability to pay should bear higher tax burden.
(4) those with equal ability to pay should bear unequal tax burden.
(5) all income earners should pay the same proportion of their income.
Correct Answer:
(3)
Answer Explanation:
Vertical equity is the principle that individuals with a higher capacity or ability to pay taxes (higher income or wealth) should bear a proportionately larger tax burden than those with a lower capacity.
Topic: Public Finance Year: 2023
Leave a Reply