28 lo5 what is the difference between horizontal and

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(28) [LO5] What is the difference between horizontal and vertical equity? How do tax preferences affect people’s view of horizontal equity?
(29) [LO3, LO5] Montel argues that a flat income tax rate system is vertically equitable. Oprah argues that a progressive tax rate structure is vertically equitable. How do their arguments differ? Who is correct?
to argue that taxpayers with a greater ability to pay should be subject to a higher tax rate. This view is based upon the argument that the relative burden of a flat tax rate decreases as a taxpayer’s income (e.g., disposable income) increases. Which is the correct answer? There is no correct answer. Nonetheless, many feel very strongly regarding one view or the other. (30) [LO3, LO5] Discuss why evaluating vertical equity simply based on tax rate structure may be less than optimal.

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