One of the most difficult issues associated with trying to structure a tax policy to satisfy horizontal equity is determining

A) whether or not a taxpayer falls within the highest income quintile.
B) the level of transfer payments made to low-income groups.
C) the source of income for taxpayers.
D) what differences are relevant to a family's ability to pay.

Horizontal Equity

The principle that individuals with similar income or assets should be taxed at the same rate, reflecting fairness in tax policy.

Tax Policy

Refers to the principles and proposals governments use to design and implement taxes, affecting economic behavior, distribution of income, and fund public expenditures.

Income Quintile

A statistical measure dividing the population into five equal groups according to their income level to analyze economic inequality.