100%(4)4 out of 4 people found this document helpful
This preview shows page 1 - 4 out of 9 pages.
Running head: WEEK THREE TEXTBOOK PROBLEMS1
WEEK THREE TEXTBOOK PROBLEMS2Week Three Textbook Problems1. [LO 1.1] What are consumption taxes? 2. [LO 1.4] Differentiate horizontal from vertical equity. Horizontal equity suggests that people with like economic incomes or in the same incomebracket should pay the same taxes. Horizontal equity is an important starting point for any tax system. Horizontal equity can be consistent with also achieving vertical equity. Horizontal equityis the equal treatment of equals and this is a means for achieving a distribution of tax burdens that is vertically equitable. Vertical Equity, on the other hand, suggests that taxpayers with higherincome and resources must pay more in tax than taxpayers with low incomes. This is fulfilled through progressive taxation, where those higher income brackets have to pay a higher rate of taxon the proportion of their income that falls into the progressively higher bands.3. [LO 1.4] When was the constitutional amendment permitting an income tax ratified? 4. [LO 1.4] What is a sin tax? A sin tax is a type of excise tax on goods that the government tries to discourage, such as tobacco and alcohol.
5. [LO 1.5] What are three objectives of income taxation?