Horizontal and vertical equity

Whether they are organized along benefit or ability to-pay lines, most modem tax item a also attempt to incorporate modem views about fairness or equity. One important principle is that of Borodin. I equity, which states that those who are essentially equal should be taxed equally.

Be warned that general and abstract principles cannot. determine’ the tax structure for a nation. When Ronald Reagan campaigned for lower taxes, he did so because he thought high taxes were unfair to those who had worked hard and saved for the future. A decade later, Bill Clinton said, “We now have real fairness in the tax code With over 80 percent of the new tax burden being borne by those who make over $200,000 a year.” What looks fair to the goose seems foul to the gander.

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