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Whatever older views might have been, income inequality is not a problem that can be ignored anywhere. Here is the good news. Many nations that have achieved some degree of income redistribution both through the tax side and the expenditure side of the federal budget. But like the Nordic nations since about 1980, they have increasingly achieved this by relying not on the tax side but the expenditure side of the budget, by channeling government spending into growth facilitating human capital formation as programs of direct budget transfers to poorer households. These lessons were widely learned; notably, from 1984 through 2000, nearly 50 nations, from Indonesia, Ghana, Mexico, Estonia, Lithonia to Poland enacted tax reforms involving much simplified, more enforceable taxes imposed at lower , flatter rates, thereby enhancing their capacity for meeting the needs of poorer groups through programs of effective government spending. As one result, by 2013 all nations had lower corporate tax rates than the U.S., where a 35% rate is virtually double the world average.

Rarely mentioned in discussions about inequality in the U.S. is the very large and increasing share of federal taxes paid by the wealthy. In 1979, the top 1% of the income distribution paid but 18% of total income taxes. By 2003, the share paid by the top 1% had climbed to nearly 35%. And, by 2010, according to the Tax Foundation the top 1% earned 19% of gross national income, and paid 38% of all federal taxes. And, by 2013, according to the Economist (September 20, 2014) this group paid 46% of total taxes but largely because of the U.S. Earned Income Tax Credit (EITC), which results in millions of families receiving checks from the Internal Revenue Service, instead of paying income taxes. The top 10% receives 45% of national income and pays 59% of taxes. The bottom 50% pays just 3% of taxes, while 40% of U.S. households pay no income taxes at all, partly because of their income tax exemptions.

Increasingly in tax reform, developing and developed countries have turned to one particular type of low-rate, simplified indirect tax as we will see in Chapter ___. This tax is the value added tax (VAT) a superior type of tax both in raising revenues and avoiding adverse economic effect. Since 1965, nearly 160 nations including Denmark, Sweden, Chile and nearly 20 African nations have adopted this highly feasible tax, including 21 in Sub-Saharan Africa and over a dozen in Latin America.

An overlooked lesson on redistribution and taxes

It is important to understand that countries can impose high rates of personal income tax and still prosper, if they can collect high rates of tax. The empirical record shows that over the years countries can indeed use high tax rates and collect the revenues (with little evasion) but only if the rates are not punitive and the taxes are used to provide services valued by taxpayers, as in Denmark, Sweden, and Norway in the late 20th and early 21st century. To illustrate, in the late 1990s, government spending in Sweden was 68% of GDP. Even after Sweden reduced substantially income and wealth taxes after 2004, government spending supported by taxes was still 52% of GDP in 2012. But the quality and coverage of government-provided public services, especially in pre-university education and health care is quite high relative to say, the U.S. The Swedish tax burden (taxes as a percent of GDP) remains high. Clearly taxes are used to provide public services valued by taxpayers, “The eight-year Itch”, The Economist , September 13, 2014. and taxpayers are not reluctant to pay taxes.

Questions & Answers

Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
is Bucky paper clear?
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Do you know which machine is used to that process?
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
On having this app for quite a bit time, Haven't realised there's a chat room in it.
what is biological synthesis of nanoparticles
Sanket Reply
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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