Vertical Equity

Vertical Equity

The concept that persons with more income and/or wealth should pay higher tax rates than those with less. This should, in theory, lead to a more equal society. While vertical equity is controversial, most countries have adopted some form of a progressive income tax, which is based on the idea.
References in periodicals archive ?
The primary approach of vertical equity is to evaluate transport policy or infrastructure projects according to how they affect accessibility between disadvantaged people/households or regions.
vertical equity. (68) Such remedial measures are most often implemented
Vertical equity demands a clear, transparent, and uniform definition of rich, which the current hodgepodge of wealth adjustments to tax rates does not achieve.
In terms of vertical equity, if the poor had more opportunity of evading taxes than the rich then the egalitarian policy makers might be happy on evasion up to a certain level.
The 2013 law, when implemented, will make the tax system more progressive, by improving vertical equity between high income and low income taxpayers, as it limits the tax deduction to R350 000.
From an efficiency perspective, there is nothing fundamentally different between filers with and without tax liability and from a distributional perspective this reduces both horizontal and vertical equity.
the concept is best expressed through "vertical equity," a
Public policies of European Union focused on inequality and poverty alleviation are influenced by the goal to achieve both horizontal and vertical equity. Horizontal equity means that people having the same financial conditions are able to pay taxes, and, therefore, should be taxed at the same rate.
In highlighting the limits of horizontal and individualist approaches to healthcare equity, Gavin raised two central questions: 'If, as is normally the case, ill health is not randomly distributed across different groups in society' but socially determined, 'might that society not want to give preference, on vertical equity grounds, for health gains to those groups in that society who are on average in poor health?' and 'What weight might be applied to such health gains and how do we differentiate between what groups are more deserving?' (Mooney 1996:102).
(8) In light of these objectives, some of Congress' primary tax policy considerations include administrability, promotion of taxpayer compliance, equity (including both horizontal equity and vertical equity), economic neutrality, and economic incentivization.
Emphasising that that principles of horizontal and vertical equity are important if a tax system is to be seen as fair, Mukherjee said that tax administration, which includes mechanisms to register taxpayers, collect revenue, enforce compliance and provide redress when required, also has a direct bearing on fairness of tax policy.
(Equality of opportunity is one example.) Equality should incorporate both horizontal equity, which means that people in the same circumstances are treated in the same way, and vertical equity, which means that differences in treatment are proportional to the differences between the circumstances of the people concerned.