Question

QUESTION 28 Which of these tax systems does not allow for vertical equity (different treatment of different people) O proportional tax O progressive tax O regressive tax Olump-sum tax QUESTION 29 When a tax is justified on the basis that taxpayers receive specific government services, the tax is considered a horizontally equitable burden is minimized satisfies the benefits principle is considered vertically equitable QUESTION 30 The argument that each person should pay taxes according to how well the individual can shoulder the burden is called the ability to pay principle the equity principle the benefits principle regressive

Answer 1

28. Option A.

A proportional tax system does not allow for vertical equity.

This is because, a proportional tax system does not change with the income.

Different people are not treated differently under this tax system as all have to pay the same proportion of tax.

29. Option C.

When taxes are justified on the basis that all tax payers receive specific government services, then the tax satisfies the benefits principle.

According to the benefits principle, every individual has to pay taxes if he/she wishes to reap the benefits from consumption.

30. Option A.

The argument that each person should pay taxes according to how well the individual can shoulder the burden is called the ability to pay principle.

According to this principle, people who has the ability to pay a higher amount and have higher incomes are taxed more than those with lower incomes.