Horizontal equity is a principle in taxation and economics that advocates for individuals with the same income or ability to pay to be taxed at the same rate, ensuring fairness and equality in the tax system. It contrasts with vertical equity, which focuses on the fair treatment of individuals with different income levels, emphasizing the importance of equal treatment for equal circumstances.

Horizontal Equity

Horizontal equity

principle in taxation

Principle in economics

individuals with the same income

ability to pay

taxed at the same rate

Fairness in the tax system

equality in the tax system

Vertical equity is a principle in economics and taxation that advocates for individuals with higher incomes to pay more in taxes, reflecting their greater ability to contribute to public finances. It aims to achieve fairness by ensuring that the tax burden is distributed according to the taxpayer's capacity to pay, thereby addressing income inequality.

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