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What type of tax is your friend suggesting

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Reference no: EM131159854

You are having a political debate with a friend. The discussion centres on taxation. You show your friend some data from your economics textbook that suggests that the average citizen paid about €10,000 in tax in 2005. Your friend says, "If €10,000 per person is what it takes to run this country, then I think that it would be much simpler if we just billed each citizen €10,000 and eliminated the complex tax system."

i) What type of tax is your friend suggesting? What is its appeal?

ii) Is this type of tax supported by the "benefits principle" of tax equity? Explain

ii) Is this type of tax supported by the "ability-to-pay" principle of tax equity? Is it vertically equitable? Is it horizontally equitable?

Reference no: EM131159854

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