Question

Senator Filch argues that tax must be paid by people who benefit from government services. Senator Fudge argues that a tax must be paid in accordance with person's ability to bear tax burden.Senator Malfoy argues that people with greater ability to pay tax should pay a larger amount. Senator Moody argues that taxpayers with similar abilities to pay should contribute the same amount .Which senator is advocating for taxes based on horizantal equity?

Answer 1

Here, Senator Moody is advocating for taxes based on horizantal equity.Horizontal equity is an economic theory that states that individuals with similar income and assets should pay the same amount in taxes. Horizontal equity should apply to individuals considered equal regardless of the tax system in place. So, from the above four senators, only senator moody is advocating in favour of taxes based on horizontal equity.The more neutral a tax system is the more horizontally equitable it is considered to be.