Which of the following statements is not correct?
A) A gasoline tax can be an example of a benefits tax.
B) A progressive tax attempts to achieve vertical equity.
C) A progressive tax can be an example of the ability-to-pay principle.
D) A regressive tax attempts to achieve horizontal equity.

Question

Quizplus · Accepted Answer

The statement "A regressive tax attempts to achieve horizontal equity" is not correct. A regressive tax is one where the proportion of income paid as tax decreases as income increases, which can be seen as a violation of horizontal equity, as those with lower incomes end up paying a higher proportion of their income in taxes compared to those with higher incomes.

Which of the Following Statements Is Not Correct