Essay On Burden Of Federal Taxation

Issue Brief

Tax burden is a critical issue under discussion not just for the government but also for the presidential candidates. Although the U.S. federal tax system has undergone several changes over the decades, the political parties have not yet reached an agreement on the pattern of the federal taxation. This brief provides a general view and discussion from different perspectives to explore the U.S. tax structure, the appropriate way to measure tax burdens, and the tax plans of several presidential candidates.

Federal Burden of Taxation

As an essential tool for collecting revenues to produce public goods and services, tax financing should be measured in actual taxes paid by individuals or businesses, combined with Average Tax Rate (ATR) and Marginal Tax Rate (MTR), and calculated by different income brackets. In addition, taxation should balance equity and efficiency as much as possible. Most often, personal incomes are used as tax bases and grouped according to their ability-to-pay. When

As for the tax proposal of candidate 1, the only change, substantially increase, would be the tax rate for the wealthiest group, the top 20%, especially for the top 1%. In other words, the original progressive tax structure would be more progressive under this proposal. Candidate 2 suggests to slightly cut the taxes for low income groups and to substantially reduce the taxes for the top 20%. After this change, the federal income tax rate for high-income people, top 20%, would be very close to the rate for the middle class, and the tax burden will tend to be a regressive pattern. In the end, candidate 3 proposes to drastically cut taxes for all groups, especially for top 5%. Under this tax plan, the tax rate for top 20% would be lower than the rate for the fourth 20%, which leads to a regressive tax structure. Thus, Candidate 1 is the one whose proposed federal tax plan is the most