Some people will say that a low tail set isn't a bad thing; that they want a horse to have a rounded croup, because they think that allows the horse to get his hind legs under himself better. That is not necessarily true. A low tail set is often accompanied by a short hip and/or poor stifle. That kind of conformation often leads to stiff movement on the rear end. Instead of flexing the hocks and striding well under the horse is more likely to swing from the hip.
If the higher tail set is accompanied by a nice long hip you will have a horse that can round his topline and stride under himself very nicely with his hind legs. A long hip and a high tail set will most likely be paired with a good width through the stifle area, and all these things work together to give the horse good hock flexion and a long, fluid stride. It is possible for a horse with a high tail set to have a very short hip, but in all honesty I don't see this as much of a problem yet in the Miniatures. We see it in some Arabians, and in certain Morgan lines--when a horse with a high tail set also has a short hip, the croup is no longer level. Rather--it tilts upward from hip bones to the dock of the tail. This kind of conformation can cause the horse to trail his hocks.
As an example of a good tail set--this pony has as good a tail set as I have come across anywhere--I wish I had him in a 37" size, but I haven't yet found this body in an under 38"--I also wish that I had a good trotting photo of him to include, but I don't have one on this computer--when he trots he sets himself up very nicely, rounding his back, elevating his front end, striding well under himself....I could see him doing Grand Prix dressage if he had a tiny rider that could ride to that level.
Or there is this guy--also too tall to be a Mini--but he has a very good tail set
And this is how he moves:
This guy is probably the most talented horse I have ever had, of any size. He can jump (and I mean JUMP) he can step high, and he has excellent extension--and I have watched him do lovely collected type pirouettes as well....he would be an awesome riding horse if he were big enough for me to ride. Again, if he were 37" tall I would have another ideal Mini.
This Mini mare has an excellent hindquarter, and I have always said that if every Mini had a stifle as good as this mare's, the Miniatures would not have stifle problems. She has a good tail set as well.