Progressive taxes can be justified as fair based on which of

Progressive taxes can be justified as fair based on which of the? following?

A.

horizontal equity

B.

vertical equity

C.

benefits received

D.

index of fairness principle

E.

None of the above answers is correct.

Solution

Vertical equity can be defined as those method of collecting income tax in which income tax burden increase with the increase in the income of the people.

Progressive tax is that tax in which income tax increase with the increase in the income of the person.

Hence progressive taxes can be justified as fair based on vertical equity because its burden is more on rich and less on poor.

Hence option B is the correct answer.