In terms of fairness, the fluctuation penalty violates the principle of horizontal equity
, which is that equals should be taxed equally.
If individuals with similar incomes differ in terms of tax payments because of tax evasion then as a result, tax evasion violates the principle of horizontal equity
(which calls for same treatment to people in an identical situation) and results into income inequality.
It will also improve horizontal equity
by harmonising the same deduction across all retirement funds.
Their efforts, however, were mostly focused on fighting tax fraud and building horizontal equity
(making sure individuals and businesses with similar levels of income pay similar levels of tax).
This suggests that the transfers should ensure horizontal equity
within states where broad strata can be readily identified (Proposition 2) (Boadway 2004).
This would improve horizontal equity
between firms receiving tax incentives and firms not receiving tax incentives.
During the 1980s and 1990s, tax reforms in Latin America were primarily focused on economic efficiency, horizontal equity
and revenue adequacy.
Ideally tax systems work to improve efficiency and horizontal equity
by administering low rates over broad tax bases.
This egalitarian principle, known as horizontal equity
, can be summarized in the following rule: equal access for equal need.
important than violating notions of horizontal equity
demands that similarly situated taxpayers pay similar amounts of tax.
However, this outcome violates horizontal equity
because both couples have the same income ($80,000) but pay different amounts in taxes.