Discuss thoroughly two of the principles often used inevaluating tax policy: ability to pay (includehorizontal and vertical equity), and the benefits principle. Canthese principles typically be satisfied simultaneously? Why or why not? Provide an example of a tax policy orinstrument which primarily emphasizes the “ability-to-pay”principle and also an example which primarily emphasizes the“benefits” principle.

Discuss thoroughly two of the principles often used inevaluating tax policy: ability to pay (includehorizontal and vertical equity), and the benefits principle. Canthese principles typically be satisfied simultaneously? Why or why not? Provide an example of a tax policy orinstrument which primarily emphasizes the “ability-to-pay”principle and also an example which primarily emphasizes the“benefits” principle.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.10P

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