Asked by Sydney Horton on Jun 24, 2024
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Individuals are allowed to deduct a percentage of their expenditures for health care from their taxable income if these expenditures are above a certain amount. This reduces the amount that must be paid in taxes. Allowing for these deductions would improve ________ of the federal income tax.
A) the horizontal equity
B) the vertical equity
C) both vertical and horizontal equity
D) the progressivity
Taxable Income
The portion of an individual's or organization's income that is subject to taxation by governing authorities.
Horizontal Equity
Horizontal equity is a principle in taxation that dictates that individuals with similar income and assets should pay the same amount in taxes.
Vertical Equity
A principle in taxation that individuals with a higher ability to pay should contribute more taxes.
- Gain insight into the essential principles shaping the structure of tax systems, like neutrality, efficiency, and equity.
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Learning Objectives
- Gain insight into the essential principles shaping the structure of tax systems, like neutrality, efficiency, and equity.
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