• For "equity" as the value of an ownership interest in property, see ownership equity or shareholders' equity.

Equity in economics is related to the idea of fairness, particularly in terms of taxation and welfare economics. Ownership equity, commonly known simply as equity, also risk or liable capital, is a financial term for the difference between a companys assets and liabilities -- that is, the value that accrues to the owners (sole proprietor, partners, or shareholders). ... In business and accounting, the shareholders equity refers to the amount of assets that are owned by a companys shareholders. ... Economics (deriving from the Greek words οίκω [oeko], house, and νέμω [nemo], distribute) is the social science that studies the allocation of scarce resources through measurable variables. ... Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution consequences associated with it. ...

Horizontal equity is the idea that people with a similar ability to pay taxes should pay the same or similar amounts. It is related to the concept of tax neutrality or the idea that the tax system should not discriminate between similar things or people, or unduely distort behaviour.

Vertical equity is the idea that people with a greater ability to pay taxes should pay more. If they pay more strictly in proportion to their income, this is known as a proportional tax or flat tax; if they pay disproportionately more then this is a progressive tax leading to redistribution. A flat tax, also called a proportional tax, is a system that taxes all entities in a class (typically either citizens or corporations) at the same rate (as a proportion on income), as opposed to a graduated, or progressive, scheme. ... A progressive tax, or graduated tax, is a tax that is larger as a percentage of income for those with larger incomes. ... For redistribution in the policital sense, please see redistricting. ...