What Is Economic Equity?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 23 October 2019
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Economic equity is a condition in which the resources, tax structures, and available assets associated with the economy of a country or even a specific region within a country are considered to be balanced and allow consumers to participate in the economy without experiencing any real financial hardship. The general idea of this type of equity is that there are enough resources to go around, the tax liability carried by individuals and businesses is not considered to be particularly burdensome for anyone, and it is possible to acquire goods and services without creating a great deal of financial stress. Economic situations of this type may occur for short periods of time and are typically considered a goal for local, regional, and national economies.

There is some difference of opinion regarding exactly how an economic equity emerges within a given economy. One school of thought holds that the price of goods and services remain somewhat static and are not subject to change based on availability and differences in the standard of living in different regions. With this approach, the cost is the same for all consumers, regardless of income level. At the same time, taxes are also similar for everyone in the area, and access to assets is sufficient for everyone to enjoy an equitable standard of living.


A slightly different understanding of economic equity focuses more on the ability of consumers to enjoy a level of tax liability and access to resources that is in keeping with individual income levels. With this application, pricing for goods and services may vary somewhat, but remain at levels that households can afford to pay without creating undue financial stress on the budget. With this approach, the focus is more on creating a structure in which those who can afford to pay more for taxes or resources do so, while those who have less income are still able to obtain that which they need without hardship.

The concept of economic equity calls for allocating or apportioning taxes, assets, and resources in a manner that is considered fair and just for everyone involved in the economy. To this end, it is not unusual for governments to implement various financial strategies in an effort to control the movement of the economy and provide a greater degree of equity for everyone concerned. While it is possible to obtain short periods in which economic equity exists, maintaining this type of equity over the long term can be extremely difficult.


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Post 3

The US government taxes individuals based on income. So the higher one earns, the higher percentage of taxes they have to pay. Does this have anything to do with economic equity?

I don't understand this because it seems like economic equity wants everyone to be treated the same because it has to be fair. So is taxing wealthy people more fair?

If everyone has the same opportunities to make money under economic equity, why does the government have to apportion taxes in a way that protects the lower-income citizens?

Post 2

@MikeMason-- That's right, it's about equal opportunity. Of course, the goal is for people to take advantage of equal wealth and services but this doesn't mean that it is handed to them. Rather, it means that the system is fair, the rules are the same for everyone, and everyone has the same opportunities to do well for themselves.

Economic equity is also about how wealth is distributed in society. One indicator of equality that many research organizations look at is the concentration of wealth. If most of the wealth in a society is concentrated at the top, say 4% of society, there is no economic equity there. If there is economic equity, then wealth will be distributed relatively evenly in society.

Post 1

So economic equity doesn't mean that everyone has equal economic status, but rather equal opportunity to be active in the economy? Did I understand this right?

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