Working Paper: NBER ID: w1679
Authors: Louis Kaplow
Abstract: Horizontal equity -- the command that equals be treated equally -- has received increased attention, particularly in attempts to measure the desirability of tax reform proposals. This paper questions whether the normative foundations for horizontal equity justify the indexes and approaches that have generally been adopted. It suggests that past attempts to implement horizontal equity are inconsistent with its supposed foundations and that more thorough examination of the concept raises serious doubts as to whether any alternative interpretation of horizontal equity reasonably consistent with common understanding of the concept can be justified.
Keywords: horizontal equity; tax reform; social welfare
JEL Codes: H21; H23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| tax reforms (H29) | unequal treatment of equals (J78) |
| definitions/indexes (C43) | difficulties in measuring horizontal equity (D63) |
| lack of justification (K40) | misguided policy decisions (E65) |
| normative significance (D63) | potential utility of horizontal equity (D63) |
| horizontal equity (J78) | vertical equity (D63) |