It seems that experts in the U.S., economists, writers and financiers, widely disagree among themselves if the top financial stratums are over taxed or undertaxed.
Why is that? How do the calculations being used differ?
In: Economics
It just depends on what you mean when you say that. Like if you are trying to estimate the effect of *all* taxes, that’s economically important to the people paying the tax. But it might not be relevant if you are trying to reform a specific policy like the federal income tax—because the federal government can’t change state taxes or local sales or property taxes.
Sometimes there is a distinction between different taxes that is important now but doesn’t necessarily need to exist, e.g., the rules for Social Security and Medicare tax are quite different but there’s nothing stopping the federal government from abolishing them and increasing the income tax instead. At this level it may be relevant to consider both the separate and the combined effects.
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