Labor Events and Resources Blog

Wednesday, March 26, 2014

Urban Institute Report: Taxes and Inequality


Urban Institute (UI)


Taxes and Inequality

by Leonard E. Burman


[full-text, 30 pages]


This paper reviews historical trends in economic inequality and tax policy’s role in reducing it. It documents the various reasons why income inequality continues to rise, paying particular attention to the interplay between regressive and progressive federal and state taxes. The report also considers the trade-off between the social welfare gains that a more equal distribution of incomes would provide, and the economic costs of using the tax system to reduce inequality, highlighting the fact that income inequality reflects an amalgam of factors. The optimal policy response reflects that complexity.



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