The vertical equity implications of the sales tax are substantially dependent on the portion of an individual's income that is spent on the items subject to the sales tax.

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Vertical equity refers to the principle that those with greater ability to pay should contribute more in taxes. Since sales tax is a consumption tax, its impact on vertical equity depends on how much of an individual's income is spent on taxable goods, with lower-income individuals potentially spending a higher proportion of their income on these goods.

The Vertical Equity Implications of the Sales Tax Are Substantially