What is the focus of horizontal equity in taxation?

The focus of horizontal equity in taxation is centered around the principle that individuals with similar financial situations should be taxed similarly. This means that if two individuals earn the same income, they should be subject to the same tax liability, promoting fairness within the tax system. The idea is rooted in the belief that equity is achieved when people in comparable circumstances are treated equally under the law, ensuring that the tax burden does not unfairly favor one group over another based solely on other factors unrelated to income.

While other concepts such as tax liability based on property value or taxation based on ability to pay are important in understanding different equity principles in tax policy, they do not directly represent horizontal equity. Similarly, fair resource allocation, while an important goal in public policy, focuses more on the distribution of societal resources and benefits rather than the equitable treatment of taxpayers with like incomes.