Two families, the Smiths and the Jones, live on the Gold Coast, Queensland, and have identical incomes.The Smiths deduct $5000 from their taxable income for mortgage interest paid during the year, while the Jones family lives in an apartment and is not eligible for a mortgage-interest deduction.This situation exemplifies:
A) an application of the benefits principle of taxation
B) a violation of horizontal equity
C) a violation of vertical equity
D) an application of egalitarian tax rules
Correct Answer:
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