Suppose Seth and Nathan are college students with the same annual income, yet Seth pays half of the annual income tax that Nathan does
Which statement best summarizes a possible issue with this outcome from a principle of tax policy perspective? a. It violates the principle of vertical equity. b. It violates the principle of diagonal equity. c. It violates the principle of horizontal equity.
d. It violates the benefit principle.
c
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Suppose a study showed that as the income of doctors increased, doctors spent more time on the golf course and less in the office. What would such a conclusion say about the relative sizes of substitution and income effects?
Cost-of-service regulation allows regulated companies to charge prices that
A) reflect the cost of regulating the industry, plus the marginal cost of the product. B) allow monopoly profits to the producer. C) reflect the actual average cost of providing the services to the customer. D) are determined by competition in other geographic markets.