Which of the following principles encourages a vertically equitable tax system?
A)Pay-as-you-go
B)Economy
C)Income effects
D)Ability to pay principle
E)None of the choices are correct

Question

Quizplus · Accepted Answer

The ability to pay principle states that individuals should be taxed according to their ability to pay. This encourages a vertically equitable tax system where those who earn more income pay a higher proportion of their income in taxes.

Which of the Following Principles Encourages a Vertically Equitable Tax