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Horizontal equity of taxation: citizen beliefs and policy preferences

Author

Listed:
  • Pierre Bachas

    (Institute for Fiscal Studies)

  • Christopher Hoy

    (Institute for Fiscal Studies)

  • Anders Jensen

    (Institute for Fiscal Studies)

  • Mahvish Shaukat

    (World Bank)

Abstract

Horizontal inequity occurs when employees and self-employed workers with the same income end up with different effective tax burdens, due to the difficulty of enforcing taxes on the self-employed. Based on detailed micro-tax simulation models integrated with household surveys in 25 developing countries, this paper shows that tax systems incur large horizontal inequities in practice, and reforms that improve vertical equity worsen horizontal equity by a comparable amount. In-person and online surveys across multiple countries reveal widespread concern about horizontal equity. Randomized information treatments heighten this concern but do not shift tax preferences toward addressing horizontal inequity.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Pierre Bachas & Christopher Hoy & Anders Jensen & Mahvish Shaukat, 2026. "Horizontal equity of taxation: citizen beliefs and policy preferences," IFS Working Papers W46/46, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:46/46
    as

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    File URL: https://ifs.org.uk/sites/default/files/2026-08/WP202646-Horizontal-equity-of-taxation-citizens-beliefs-and-policy-preferences.pdf
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    References listed on IDEAS

    as
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