Consider the two principles of fair taxation, the benefits principle and the abi

Question

Consider the two principles of fair taxation, the benefits principle and the abilityminustominuspay principle,

A. Both are based on horizontal equity.

B. Both are based on vertical equity.

C. Both state that people should pay taxes according to the benefits they receive from public services.

D. Both state that people should pay taxes according to how easily they can bear the burden.

E. Both present conflicting ideas on the fairness of taxes.

Consider the two principles of fair taxation, the benefits principle and the abilityminustominuspay principle,

A. Both are based on horizontal equity.

B. Both are based on vertical equity.

C. Both state that people should pay taxes according to the benefits they receive from public services.

D. Both state that people should pay taxes according to how easily they can bear the burden.

E. Both present conflicting ideas on the fairness of taxes.

Taxes on corporate profit are a type of ________ tax. A. sales B. regressive C. selling D. property E. income

Explanation / Answer

1) Consider the two principles of fair taxation, the benefits principle and the ability to pay principle,

Solution: Both present conflicting ideas on the fairness of taxes.

Explanation: The benefits principle and ability-to-pay principle are two conflicting principles of fairness of taxes. The benefits principle states that the proposition that people must pay taxes that equal to the gains they receive from public goods and services. Conversely ability-to-pay principle states that proposition that people must pay taxes as per how easily they can bear tax burden

2) Solution: regressive tax

Explanation: Corporate tax is imposed is in a way that the tax rate declines as the amount subject to taxation increases

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