UPSC Exam > UPSC Questions > Consider the following statements. 1. Indivi...
Start Learning for Free
Consider the following statements.
1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.
2. When 'better-off' people pay more taxes, it is known as vertical equity.
Which of these statements is/are correct?
- a)1 Only
- b)2 Only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Consider the following statements. 1. Individuals in identical or sim...
- Individuals in identical or similar situations paying identical or similar taxes are known as horizontal equity'.
- When 'better-off' people pay more taxes, it is known as vertical equity.
This question is part of UPSC exam. View all UPSC courses
Most Upvoted Answer
Consider the following statements. 1. Individuals in identical or sim...
Explanation:
Horizontal equity:
- Horizontal equity refers to the concept that individuals in identical or similar situations should pay identical or similar taxes.
- It implies that individuals with the same level of income and wealth should be treated equally in terms of tax liability.
- This principle ensures fairness and equal treatment among individuals who are in similar economic circumstances.
- Horizontal equity is based on the idea that people in similar situations should contribute to public finances in a similar manner.
Vertical equity:
- Vertical equity refers to the concept that individuals with higher incomes or wealth should pay a greater amount of taxes.
- It implies that those who are 'better-off' should contribute a higher proportion of their income or wealth through taxation.
- This principle aims to achieve a more progressive tax system, where the burden of taxation is distributed according to the ability to pay.
- Vertical equity recognizes that individuals with higher incomes or wealth have a greater capacity to bear the tax burden compared to those with lower incomes or wealth.
Correct answer:
- The correct answer is option 'C' - Both 1 and 2.
- Both statements 1 and 2 are correct as they correctly define horizontal and vertical equity respectively.
- Statement 1 explains horizontal equity, where individuals in identical or similar situations pay identical or similar taxes.
- Statement 2 explains vertical equity, where 'better-off' people pay more taxes, reflecting the progressive nature of taxation.
Conclusion:
- Horizontal and vertical equity are important principles in designing a fair and progressive tax system.
- Horizontal equity ensures that individuals in similar economic situations are treated equally, while vertical equity ensures that those with higher incomes or wealth contribute more to public finances.
- By incorporating both principles, a tax system can aim to achieve a balance between fairness and progressivity.
Horizontal equity:
- Horizontal equity refers to the concept that individuals in identical or similar situations should pay identical or similar taxes.
- It implies that individuals with the same level of income and wealth should be treated equally in terms of tax liability.
- This principle ensures fairness and equal treatment among individuals who are in similar economic circumstances.
- Horizontal equity is based on the idea that people in similar situations should contribute to public finances in a similar manner.
Vertical equity:
- Vertical equity refers to the concept that individuals with higher incomes or wealth should pay a greater amount of taxes.
- It implies that those who are 'better-off' should contribute a higher proportion of their income or wealth through taxation.
- This principle aims to achieve a more progressive tax system, where the burden of taxation is distributed according to the ability to pay.
- Vertical equity recognizes that individuals with higher incomes or wealth have a greater capacity to bear the tax burden compared to those with lower incomes or wealth.
Correct answer:
- The correct answer is option 'C' - Both 1 and 2.
- Both statements 1 and 2 are correct as they correctly define horizontal and vertical equity respectively.
- Statement 1 explains horizontal equity, where individuals in identical or similar situations pay identical or similar taxes.
- Statement 2 explains vertical equity, where 'better-off' people pay more taxes, reflecting the progressive nature of taxation.
Conclusion:
- Horizontal and vertical equity are important principles in designing a fair and progressive tax system.
- Horizontal equity ensures that individuals in similar economic situations are treated equally, while vertical equity ensures that those with higher incomes or wealth contribute more to public finances.
- By incorporating both principles, a tax system can aim to achieve a balance between fairness and progressivity.
Attention UPSC Students!
To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.
|
|
Explore Courses for UPSC exam
|
|
Similar UPSC Doubts
Top Courses for UPSCView all
Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
Question Description
Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
Solutions for Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consider the following statements. 1. Individuals in identical or similar situations paying identical or similar taxes is known as horizontal equity'.2. When 'better-off' people pay more taxes, it is known as vertical equity.Which of these statements is/are correct?a) 1 Onlyb) 2 Onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup