Consider two families, each of whom earn total income of $80 000, but that are different in many other respects. If each family is assessed income tax payable of $14 749, then it is very likely that the principle of is being violated.

Question

Quizplus · Accepted Answer

Horizontal equity states that individuals or families with the same income should pay the same amount of taxes. In this case, both families have the same income of $80 000, yet are being assessed the same amount of tax payable despite having different circumstances (not specified in the question). This violates the principle of horizontal equity.

Consider Two Families, Each of Whom Earn Total Income of $80