A tax is characterized by horizontal equity if its liability is



[ A ]    proportional to the income of tax payers
right
[ B ]    similar for tax payers in similar circumstances
[ C ]    proportional to the expenditure of tax payers
[ D ]    the same for every tax payer
Answer : Option A
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes. Vertical equity is the idea that people who has a higher ability to pay more than those who have a lower ability to pay, as long as the increase in tax level is considered to be reasonable.

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