In The News

In The News Tax Reform around the World Over the past decade, an increasing number of nations have adopted a flat to tax system under which the marginal tax rate is the same for all...

CASE STUDY

CASE STUDY HOW. THE TAX BURDEN IS DISTRIBUTED Much debate over tax policy concerns whether the wealthy pay their fair share. There is no objective way to make this judgment. In evaluating the issue for yourself, however, it is useful to know how much , families with...

Vertical Equity

Vertical Equity Consider the three tax systems in Table 7. In each case, taxpayers with higher incomes pay more. Yet. the systems differ in how quickly taxes rise with income. The first system is called proportional because all taxpayers pay the same fraction of...

THE ABILITY TO PAY PRINCIPLE

THE ABILITY TO PAY PRINCIPLE Another way to evaluate the equity of a tax system is called the ability to pay principle, which states that taxes should be levied on a person according to how well that person can shoulder the burden. This principle is sometimes...

THE BEN EATS PRINCIPLE

THE BEN EATS PRINCIPLE One principle of taxation, called the benefits principle, states that people should pay taxes based on the benefits they receive from government services. This principle tries to make public goods similar to private goods. It seems fair that a...

TAXES AND EQUITY

TAXES AND EQUITY Ever since American colonists dumped imported ~ into Boston harbor to protest high British taxes, tax policy has generated some of the most heated debates in American politics. The heat is rarely fueled by questions of efficiency. Instead, it arises...