I have been thinking about the IRS concept of Horizontal Equity and it has occurred to me that Horizontal Equity actually attempts to do something that the U.S. tax code has never claimed as one of its goals, and that is to “equalize outcomes” for all taxpayers. The U.S. income tax system has always publicly been portrayed by the politicians as being a “progressive” tax system. A progressive tax system places the burden of income taxation on those citizens who have increasingly higher outcomes while putting little to no tax burden on those with lower incomes. Having a tax system that varies the amount of income tax charged by using income as the guide for collecting tax is much different from having a tax principle that attempts to guarantee equality of outcome or assure that everyone strictly has access to only the same taxation rules without regards to differing circumstances.
Progressive taxation is fundamentally in line with the goals of Capitalism because it acknowledges the fact that people are not all equally equipped when it comes to natural talent. industriousness or circumstance. Progressive taxation does not attempt to make sure that any one is prevented from profiting from any of these three advantages. Instead it exploits these advantages by increasing the level of taxation that is born by people who employ their advantages.
Horizontal Equity is the exact opposite. Horizontal Equity strictly forces the same tax circumstance upon expat and resident taxpayers. The language of the imposition is couched strictly in the negative, where expats are forbidden access to the unique and sometimes not so unique tax provisions of their country of residence. Forcing the same circumstances upon everyone is the central tenet of Socialism. So it would seem that, under the name of Horizontal Equity, the U.S. does embrace a form of taxation Socialism which is reserved strictly for expats, while espousing taxation capitalism for homelanders.
This was just a thought that I had tonight. Comments and corrections are most definitely sought.