Correct/ Complete Question: Horizontal equity means that two taxpayers with similar economic situations pay roughly the same amount of tax. True or False.
Answer:
True
Step-by-step explanation:
Horizontal equity is an economic theory that says that individuals that have similar income and assets(economic situations) should pay the same amount in taxes. This theory ignores any pre-existing tax system thus making the tax system neutral. The more neutral a tax system of an economy is, the easier it is to attain horizontal equity. This theory takes its basis from the fact that people who are in the same income range should have the same taxes imposed on them.
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