The ability-to-pay principle of taxation suggests that if a tax system is to be vertically equitable, it should be

Question

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The ability-to-pay principle suggests that those who have a higher ability to pay taxes (i.e. higher income earners) should contribute a larger percentage of their income in taxes than those with a lower ability to pay. This is achieved through a progressive tax system, where the tax rate increases as income increases. Therefore, choice B (progressive) is the best answer.

The Ability-To-Pay Principle of Taxation Suggests That If a Tax