Which of the following would give evidence of horizontal equity? a. A three-bedr

Question

Which of the following would give evidence of horizontal equity?

a. A three-bedroom house in Bloomington has a property tax bill of $1,000; an equivalent three-bedroom house in Fort Wayne has a property tax bill of $5,000.

b. The property tax bill on my house was $800 in 1985. Even though I have not remodeled my property at all—it is the same property—my bill in 1998 is $3,000.

c. My next door neighbor’s property tax bill is $2,000; my bill is $3,000, even though we receive exactly the same government services.

d. None of the above.

Explanation / Answer

Option C.

Horizontal equity means paying the same amount of taxes if income and assets of two individuals are same and they are getting same government services. In the option C, the amount of property taxes has increased due to increase in the property value over the period of time. That’s why in 1998, he has having to pay higher amount in taxes.

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