The surrender of equal measures of utility by taxpayers.
Equal sacrifice theory has three sub-groups:
1. Equal absolute sacrifice (where each taxpayer surrenders the same absolute degree of utility that he obtains from his income).
2. Equal proportional sacrifice (where each sacrifices the same proportion of utility he receives from his income).
3. Equal marginal sacrifice (where each gives up the same utility from the last unit of income): It is often used to justify progressive taxation. The idea is to examine what a person gives up when the last dollar of taxes is paid. To pay the last $50 in taxes, a low-income person might have to give up something essential, such as a pair of shoes. A high-income person might give up a luxury of little practical value or necessity. Accordingly, taxes should be increased on the high-income person and reduced on the low-income person until both sacrifice equally when the last dollar of taxes is paid.