What Is Vertical Equity?
The vertical tax burden is also called "vertical burden vertical equity" (Vertical Equity), is the symmetry of horizontal equity tax burden (Horizontal Equity). Vertical tax burden means that people with different economic or tax capacity should pay different amounts of tax.
Vertical tax burden
discuss
- Chinese name
- Vertical tax burden
- Foreign name
- Vertical Equity
- Features
- The greater the affordability, the heavier the tax burden
- Field
- economic
- The vertical tax burden is also called "vertical burden vertical equity" (Vertical Equity), is the symmetry of horizontal equity tax burden (Horizontal Equity). Vertical tax burden means that people with different economic or tax capacity should pay different amounts of tax.
- meaning
- Generally speaking, vertical fairness is more complicated than horizontal fairness. The reason is that vertical fairness treats people with different conditions in different ways. It is not only necessary to judge that the taxpayer's economic capacity or tax payability should be the same, that is, horizontal fairness. And there must be some measure to measure the economic ability or tax ability of different taxpayers.
- In the case of different taxpayer affordability, there are three cases for dealing with the relationship between tax burden and affordability:
- 1. Regressive, that is, the greater the affordability, the lighter the tax burden. This situation generally only occurs on the taxation of the turnover of daily necessities.
- 2. Proportion, that is, the ratio of affordability and tax burden is the same in any case, that is, the burden is equal in form, but if it is measured from the actual affordability, it is also relatively Regressive, that is, the greater the affordability, the lighter the tax burden.
- 2. Progressive, that is, the proportion of the tax burden that is greater than the affordability is smaller than the affordability. Only then can the tax burden be relatively fair in terms of affordability. The vertical fairness of taxation is relative. It cannot be universally applied to all taxpayers. It is best suited to deal with the tax burden of personal income and not mainly used to deal with the tax burden of corporate income.