Horizontal equity is defined in terms of taxpayers in similar situations whereas vertical equity is defined in terms of taxpayers in different situations.

Question

Quizplus · Accepted Answer

This is the correct definition of horizontal and vertical equity. Horizontal equity uses a "equal treatment for equals" approach, meaning that taxpayers in similar situations should be treated equally. Vertical equity uses a "unequal treatment for unequals" approach, meaning that taxpayers in different situations should be treated differently based on their ability to pay.

Horizontal Equity Is Defined in Terms of Taxpayers in Similar