Equity is a notion of the fairness or justice
Equality is a notion that everything should be the same
People can have different views regarding what they view as fair
Differences in peoples views influence policy
Horizontal and Vertical Equity
Horizontal equity states that people with a similar ability to pay taxes should pay the same or similar amounts.
This relates to the concept of tax neutrality.
Vertical equity states that people with a greater ability to pay taxes should pay more.
