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What would the following changes to the federal taxation system have on income inequality: 3.Increase the...

What would the following changes to the federal taxation system have on income inequality:

3.Increase the federal payroll tax paid by employers by 1 percentage point for any worker the employer pays more than $200,000 in a calendar year.

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Expert Solution

The increase in tax by 1 percent for people who earn more than $200,000 can get to benefit the ones who is below that income as redistribution of income is done after taxation and this can reduce the amount of inequality that existed earlier. Therefore, in this regard it can be mentioned that if the taxation is increased by one percent for people who are above $200,000, the levels of income inequality gets to decrease all in all.

Rahul Sunny answered 2 years ago
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