Vertical equity means that
A)taxpayers with the same amount of income should pay the same amount of tax.
B)taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income.
C)all taxpayers should pay the same tax.
D)none of the above.

Question

Quizplus · Accepted Answer

Vertical equity means that taxpayers with greater ability to pay taxes should pay more than those with lower ability to pay. Therefore, taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income. Choice A would imply horizontal equity, which means taxpayers with equal ability to pay taxes should pay the same amount. Choice C is not equitable as it doesn't take into consideration the ability to pay taxes. Choice D is incorrect as option B is the correct definition of vertical equity.

Vertical Equity Means That