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Income tax aside, do the burdens of other major tax sources fall evenly on taxpayers?

Monday, June 14, 2021
By Lisa Freedland
NO

Aside from income taxes, Americans pay a variety of other taxes. These broad taxes tend to impose higher relative burdens at lower incomes. So income taxes are often the main policy focus in discussions of economic inequality and overall fairness.

  • Federal Social Security taxes take a flat percentage of wages up to a fixed level of income ($142,800 in 2021).
  • Most forms of sales tax and excise taxes (such as tobacco taxes) are regressive, as lower-income earners spend more of their income on consumption than higher-income households.
  • While property taxes are considered fairly efficient, some researchers find that the system nonetheless tends to favor wealthier owners (who may own multiple expensive properties) for a variety of reasons. “Many properties aren’t properly assessed,” one analyst observes, as less expensive property in poor neighborhoods is often taxed at relatively higher rates.
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