How do taxes affect income inequality? Q.How do taxes affect income inequality? A.Because high-income households pay a larger share of their income in total federal taxes than low-income households, federal taxes reduce income inequality. But federal taxes have done little to offset increasing income inequality over the past 40 years. Read more about How do taxes affect income inequality?
What were the economic effects of the Tax Cuts and Jobs Act? Q.What were the economic effects of the Tax Cuts and Jobs Act? A.Most analysts expected the Tax Cuts and Jobs Act to boost economic output modestly in both the short and the longer run. The evidence supports the prediction for the short run. Because they are confounded by the large and lasting effects of the COVID pandemic and related policies, we will probably never be able to disentangle the long-term effects. However there was little evidence of a strong effect on investment that could lead to higher longer-run growth in the years before the pandemic. Read more about What were the economic effects of the Tax Cuts and Jobs Act?
On what do economists agree and disagree about the effects of taxes on economic growth? Q.On what do economists agree and disagree about the effects of taxes on economic growth? A.Economists generally agree that people and businesses respond to taxes and that large tax changes can move the economy. But economists have not (and probably cannot) pin down exactly how the economy works and how responsive people and businesses are to policy changes. As a result, economists often disagree about what models and parameters to use to analyze tax policies. Those scientific disagreements are sometimes amplified by value judgments about appropriate policy. Read more about On what do economists agree and disagree about the effects of taxes on economic growth?