Taxation and Prosperity: The Role of Tax Policies in Economic Equity and Development

Policy makers and economists need to study how fiscal policies work on economic growth and wealth gap, and two major issues in this field are related to each other to form a crucial research topic. Differences in the construction of tax systems in an economy lead to a significant effect on the inequality of income distribution and the rate of development, and the imbalance in the distribution of wealth is referred to as the obvious disparity between the rich and the poor within a given economy, while the economic growth shows that the productivity increases during the period. In order to narrow the gap between the rich and the poor and increase the overall strength of the economy, it is crucial for governments around the world to adopt tax policy tools. The purpose of this thesis is to explore the impact of various tax provisions on economic growth and the gap between the rich and the poor. Based on the existing academic findings, this study analyzes in depth how tax policy works in different ways on capital accumulation, labor inputs, and the distribution of profits, and it is found that a progressive tax system is conducive to narrowing the inequality between the rich and the poor, while tax cuts are likely to widen the gap between the rich and the poor. promote economic growth in the short run but the final phase of the study formulated a series of policy recommendations aimed at improving the tax system to promote stable economic growth and equitable income distribution.