Definition
- Vertical equity
- Vertical equity is treating people in different economic positions differently, in a way judged fair, such as asking those with higher incomes to pay more.
Example
Can you think of an example of vertical equity?
UK income tax rates rise in bands as income rises, so someone earning £100,000 pays a larger share of their income in tax than someone earning £20,000.
Test yourself
Can you name the two kinds of equity economists use to judge whether people are treated fairly?