Which type of equity involves higher tax burdens applying to taxpayers with high incomes compared to those with low incomes?

Vertical equity is the principle that taxpayers with a greater ability to pay taxes should contribute a larger amount. This concept is often applied in the context of income taxation, where individuals with higher incomes face higher tax rates or burdens than those with lower incomes. The core idea is based on the notion of fairness in taxation, suggesting that those who can afford to pay more should do so to support government services and programs.

In a vertical equity system, tax structures are designed to ensure that wealthier individuals contribute a proportionally larger share of their income to taxes. This principle underlies progressive tax systems, where tax rates increase as income rises, leading to higher tax burdens on high-income earners relative to low-income earners.