Under the diminishing-marginal-utility approach to taxation, which of the following statements is not…
A proportional tax applies the same rate across income levels. Under the diminishing-marginal-utility approach to ability to pay, equal rates need not represent equal…
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Under the diminishing-marginal-utility approach to taxation, which of the following statements is not correct regarding proportional taxation ?
Answer and explanation
Correct answer D
A proportional tax applies the same rate across income levels. Under the diminishing-marginal-utility approach to ability to pay, equal rates need not represent equal sacrifice, so proportionality does not satisfy that equity criterion.
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