Briefing

How Can We Make a Progressive Tax System More Efficient?

Abstract: In the U.S., income tax rates rise as households earn more. However, such a system means workers have a reduced incentive to increase their earnings. In this article, I discuss a finding from one of my papers that explores the possible effects of targeting tax rates on additional characteristics besides income.

Keywords: income tax; tax system; income inequality;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2024-08

Volume: 24

Issue: 26