Question no 2928 SSC CGL Tier 1 Genral Awareness Questions and Answers Online Test 79

SSC CGL Tier 1 :: GA Test 79

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1 .

A tax is characterized by horizontal equity if its liability is

[ A ] proportional to the income of tax payers
[ 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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