Individuals are allowed to deduct a percentage of their expenditures for health care from their taxable income if these expenditures are above a certain amount. This reduces the amount that must be paid in taxes. Allowing for these deductions would improve ________ of the federal income tax.

A) the horizontal equity
B) the vertical equity
C) both vertical and horizontal equity
D) the progressivity

Allowing deductions for health care expenditures that exceed a certain amount can improve both horizontal equity (treating equals equally) by adjusting for differences in health care costs among individuals with similar incomes, and vertical equity (treating unequals unequally) by providing more significant tax relief to those with high health care costs relative to their income, thus acknowledging their reduced ability to pay taxes compared to healthier individuals with similar incomes.