U.s. Federal Tax Policy Essay

1225 WordsNov 18, 20165 Pages
For some time now, the United States economy has been trending in the direction of social injustice. Income inequality is ever expanding, and the primary reason is that those people at the very top of the income distribution are accumulating wealth at rates never seen before. The rich are getting richer to the extent that they are driving a massive wedge between socio-economic classes within the United States, and the impacts are far-reaching. Combating this inequality begins with an examination of the economic policies currently in place. Federal tax policy is an ideal place to start, considering the prominent role it plays in determining the distribution of wealth. Tax policy is among the most influential drivers of economic development. Naturally, it’s also one of the most debated and pressing issues facing policymakers in the United States. Today, the U.S. federal tax system is generally progressive, meaning that the total federal tax constitutes a larger percentage of income for higher-income individuals and households than it does for those earning lower incomes (Piketty and Saez, 2006). However, not all individual taxes are equally progressive. Some are even regressive. For instance, payroll taxes for Social Security and Medicaid are regressive (Piketty and Saez, 2006). But the taxes responsible for generating a majority of government revenue are the individual and corporate income taxes. Both of these taxes are progressive, which yields an overall tax system that is

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