Differences between vertical equity and horizontal equity in income tax collection. Vertical equity means collecting income tax in a way that is linked to taxpayers' income levels, so higher income taxpayers pay more tax. Horizontal equity means taxpayers with similar incomes should pay similar amounts of tax.
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Equity in Taxation Explained
Differences between vertical equity and horizontal equity in income tax collection. Vertical equity means collecting income tax in a way that is linked to taxpayers' income levels, so higher income taxpayers pay more tax. Horizontal equity means taxpayers with similar incomes should pay similar amounts of tax.