第12章税制的设计.pptVIP

* * * * * * * * * This slide replicates Table 7 in the textbook. Point out that even a regressive income tax satisfies vertical equity, as vertical equity only requires that the dollar amount of taxes rise with income, not the average tax rate. * The tax rates in this table are for single filers. Source: . Note on interpreting the table: The tax rates shown are marginal tax rates that apply only to income in the corresponding brackets. For example, a person earning $30,000 would pay 10% on the first $7825 of income, and 15% on income above $7825. He would not pay 15% on his ENTIRE income. As the table shows, the U.S. income tax is progressive. This table excludes transfer payments, which accrue mainly to lower income persons. Factoring in transfer payments, the system looks even more progressive. * * * In this exercise, Sam and Diane’s problem arises because, as singles, each enjoys a $20,000 income exclusion, so the first $40,000 of their combined income is excluded from taxes. As a married couple, only the first $20,000 of income is excluded. One way to fix this is to double the exclusion for married couples relative to single tax filers. But doing so causes another problem, as we will see in the second part of this exercise… * Here, we have changed the tax code to eliminate the marriage penalty that couples like Sam and Diane face: we have doubled the exclusion for married couples. However, this creates a different kind of problem for other couples, as students will learn when they work through this exercise. * * * The first two of these four properties relate to horizontal equity. The last two relate to vertical equity. * * The corporate income tax is popular among voters. After all, corporations are not people. Voters are always eager to have their taxes reduced and have some faceless corporation pick up the tab. But if the true incidence of the corporate income tax were widely understood, it might be much less popular.