The concept of vertical equity is derived from
A)the benefit principle.
B)the ability-to-pay principle.
C)fiscal federalism.
D)the proportionality of the income-tax system.
E)the understanding that taxes generate distortions in the economy.

Question

Quizplus · Accepted Answer

Vertical equity is based on the ability-to-pay principle, which holds that those who can afford to pay more taxes should do so. This principle is often used to guide progressive tax systems, where higher income earners are required to pay a higher percentage of their income in taxes compared to lower income earners.

The Concept of Vertical Equity Is Derived from