Browsing by Subject "Inequality"
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Item As urban life resumes, can US cities avert gridlock?(The Conversation, 2021-06-15) Short, John RennieItem Inequality of Opportunity in the U.S.A.(The Baltimore Sun, 2015-07-02) Kassner, Joshua J.We like to tell ourselves stories about the virtues of America, particularly as Independence Day rolls around each year. There is, perhaps, no better example than the story we tell our children that no matter your race, gender or wealth, in America you can become anything you want to be. This particular example captures the idea that America is a meritocracy, a place where talent and effort are rewarded. If true, then one is not trapped by circumstances beyond his or her control. We like to believe that the inequities that exist at any moment are not permanent and that those persisting over time are merely a reflection of what individuals deserve. Ultimately, this is a story about equality of opportunity.Item Optimal progressive income taxation in a Bewley-Grossman framework(Towson University. Department of Economics, 2017-03) Jung, Juergen; Tran, Chung; Towson University. Department of EconomicsWe study the optimal income tax progressivity in a Bewley-Grossman model where individuals are exposed to income and health risks over the lifecycle. Our results, based on a calibration for the US economy, indicate that the presence of health shocks requires the government to set higher optimal levels of tax progressivity in order to provide more social insurance for unhealthy low income individuals who have limited access to health insurance. The optimal progressive income tax system includes a tax break for income below $36, 400 and high marginal tax rates of over 50 percent for income earners above $200, 000. The tax progressivity (Suits) index—a Gini coefficient for income tax contributions by income—of the optimal tax system is around 0.53, compared to 0.17 in the benchmark tax system. Welfare gains from switching to the optimal tax system amount to over 5 percent of compensating lifetime consumption. The presence of health risk amplifies the social insurance role of the progressive income tax system. The optimal tax system in our model with health risk is more progressive than the optimal tax systems in models without health risk (e.g., Conesa and Krueger (2006) and Heathcote, Storesletten and Violante (2017)). When health risk is removed from the model, the optimal tax system becomes less progressive and thus more similar to the optimal progressivity levels reported in the literature. In addition, the optimal level of tax progressivity is strongly affected by the design of the health insurance system.