Tax Policy Analysis

Tax Policy Analysis

Choose a topic related to tax policy and do an analysis of that project (5 – 6 pages)

• What is the purpose of a tax system? Is it primarily to raise revenue? To redistribute resources? To influence decisions? While all may be important, which, in your mind, is the priority?

• How do you define fairness in a tax system? Are you concerned about the fairness of the overall tax system? Is fairness more important for certain types of taxes (like income taxes) than for others (such as excise or sin taxes)?

• When you think about tax fairness, how does the use of tax money impact your evaluation of fairness? If a particular group is taxed more heavily, does it matter if that group also receives more of the benefits on which that tax revenue is spent?

• If everything a government does takes money from someone’s pocket, and puts it into someone else’s pocket, how do you determine who’s pocket money should come from, and who’s pocket money should go into?

• When thinking about redistribution and tax progressively, are you more concerned about the income/tax distribution in a given year, or should we be concerned with lifetime incidence? As an example, most college students would be considered poor during any year they are in college, but are likely not poor over the course of their lifetime. How should we consider this in taxation?

• What three changes would you make to the current tax system? Why did you choose these items? How would these improve the tax system?

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