"Taxpayers who earn $100,000 in dividends should pay the same amount of tax as taxpayers who earn $100,000 in capital gains." This statement reflects which of the following qualitative characteristics of an effective tax system?

Question

Quizplus · Accepted Answer

This statement reflects the principle of horizontal equity, which states that taxpayers in similar situations should be treated equally. The statement suggests that taxpayers with the same level of income should pay the same amount of tax regardless of the source of that income. Therefore, option D, horizontal equity is the best choice.

"Taxpayers Who Earn $100,000 in Dividends Should Pay the Same