Economics @ ITT

Income and Tax Redistribution

This is a good article discussing tax redistribution and income inequality from 2000 to 2007. Notice that the top fifth of income earners received about $18,713 in tax breaks, while the bottom fifth only got $706. Well, of course, the high income families woudl be expected to get a larger break because they have more money in the first place; so, notice as well that on a percentage basis, the top quintile received a break of 12.82% versus 6.97%. This is known as a regressive tax policy. The top tier started from a higher base, so mathematically this is not entirely shocking. However, it does depict a trend diminishing the benefits of a progressive taxation system. There are some interesting responses after the main post, too.


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