Negative effects of US taxation
AbstractPurpose – The purpose of this paper is to criticize the current US tax system and explain in what ways taxation harms the economy. Taxes are coercive. Taxpayers are forced to pay individual income taxes. If the taxpayer refuses, several adverse consequences will unfold against him even including jail-time. Taxes diminish taxpayer's disposable income and leave consumer's wants unattended. The money they could have used to fulfil their wants goes instead to the government in the form of taxes. Design/methodology/approach – Taxation is analyzed from an economic point of view. Findings – Progressive taxation is harmful to the economy because it punishes successful individuals. The more they earn (a reflection of the productive value they bring to the market), the more they have to pay. Meanwhile less productive citizens paying little or no tax are receiving “benefits” derived from the investment of more successful taxpayers. These are inefficient since they reduce incentives. Taking money from Peter and giving it to Paul decreases the incentive, both have to earn an income and be productive. Finally, the paper exposes the influence government has over taxpayer's decisions. Originality/value – We live at a time in the US when President Obama is calling for greater taxation for the rich, and the Republicans are rejecting this initiative on the ground that it is “class war.” A study of taxation at this point cannot help but shed light on this controversy. JEL classification: H0, H1, H2
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Studies in Economics and Finance.
Volume (Year): 29 (2012)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Find related papers by JEL classification:
- H0 - Public Economics - - General
- H1 - Public Economics - - Structure and Scope of Government
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feldstein, Martin S, 1978.
"The Welfare Cost of Capital Income Taxation,"
Journal of Political Economy,
University of Chicago Press, vol. 86(2), pages S29-51, April.
- J. A. Mirrlees, 1976.
"Optimal Tax Theory: A Synthesis,"
176, Massachusetts Institute of Technology (MIT), Department of Economics.
- Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73, pages 110.
- Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73, pages 351.
- Browning, Edgar K, 1987. "On the Marginal Welfare Cost of Taxation," American Economic Review, American Economic Association, vol. 77(1), pages 11-23, March.
- Feldstein, Martin, 1973. "On the optimal progressivity of the income tax," Journal of Public Economics, Elsevier, vol. 2(4), pages 357-376.
- Feldstein, Martin, 1976. "On the theory of tax reform," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 77-104.
- Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production II: Tax Rules," American Economic Review, American Economic Association, vol. 61(3), pages 261-78, June.
- Browning, Edgar K, 1981. "A Theory of Paternalistic In-Kind Transfers," Economic Inquiry, Western Economic Association International, vol. 19(4), pages 579-97, October.
- Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, vol. 38(114), pages 175-208, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Lister).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.