One of the most difficult issues associated with trying to structure a tax policy to satisfy horizontal equity is determining
A)whether or not a taxpayer falls within the highest income quintile.
B)the level of transfer payments made to low-income groups.
C)the source of income for taxpayers.
D)what differences are relevant to a family's ability to pay.

Question

Quizplus · Accepted Answer

Horizontal equity in tax policy refers to the principle that individuals with similar financial situations should be taxed similarly. The challenge lies in determining what differences (such as family size, medical expenses, etc.) are relevant to assessing a family's or individual's ability to pay taxes, ensuring that those in similar situations are treated equally.

One of the Most Difficult Issues Associated with Trying to Structure