Ian Eberle

Date of Award

2018

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Yu, Sherry

Area of Concentration

Economics

Abstract

This paper examines recent literature on federal income tax progressivity, focusing primarily on how progressive taxation affects efficiency, distribution, and growth in the economy. While this paper acknowledges the inverse relationship between efficiency and equity, it finds that economists are largely in disagreement over other aspects of tax reform, particularly whether the income tax code can significantly affect long-run economic growth. Empirical evidence from prior tax reform is mixed, and calls to question long-held assumptions regarding the behavior of taxpayers. This paper further explores several alternative tax reform plans, focusing on the relationship between efficiency and equity. It concludes that tax reform faces a trade-off between efficiency and equity that must be carefully navigated given the sensitivity of the present economic conditions.

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