Question 1
When assessing a tax system, "vertical equity" refers to
◦ unequal treatment of persons with unequal incomes.
◦ equity between corporate entities.
◦ equity across different periods of time.
◦ equity across income groups.
◦ equity within a given income group.
Question 2
The concept of vertical equity is derived from
◦ the benefit principle.
◦ fiscal federalism.
◦ the ability-to-pay principle.
◦ the understanding that taxes generate distortions in the economy.
◦ the proportionality of the income-tax system.