Tax

Question 1

Vertical Equity

Answer 1

People in different positions (or with different amounts of income) should be taxed differently

Question 2

Horizontal equity

Answer 2

People in the same position (with the same levels of income) should be taxed equally

Question 3

What are the criteria for good tax?

Answer 3

Neutrality

Equity

Administrative simplicity

Question 4

Compare direct and indirect taxes

Answer 4

Direct taxes: income taxes, include personal income tax & are aimed specifically at the income & wealth of a person.

Indirect taxes: taxes on goods & services are levied on transactions. Examples like VAT, customs & excise duties