If taxes are collected on the basis of ability-to-pay and there are two taxpayers with the same income who also are identical in all other respects,which of the following is correct?
A) Vertical equity is impossible between these two taxpayers.
B) Vertical equity exists.
C) Horizontal equity exists.
D) The tax must be proportional.
E) The fair-incidence principle is potentially being violated.

Question

Quizplus · Accepted Answer

Horizontal equity is achieved when individuals with the same income and ability to pay are taxed at the same rate, which would be the case for two taxpayers with the same income and identical in all other respects.

If Taxes Are Collected on the Basis of Ability-To-Pay and There