The word "progressivity" is correct and usable in written English.
It is an adjective and is used to describe a process or system that gradually increases as it progresses. For example, "The government's new tax system is designed to promote progressivity for businesses of all sizes."
While the federal tax code is still progressive, its progressivity has eroded, with a significant percentage of the richest now paying a much lower tax rate than the merely rich and the middle class.
It argues that in an efficient capital market the burden of property taxes is borne by owners of capital across the economy; and since capital owners tend to be richer, the tax is likely to be progressive.Nuanced judgments about progressivity are not what drive political opposition to these taxes.
As Cowen goes on to point out, an increase in the capital gains tax rate will fall disproportionately less on the most diversified investors (who'll have a greater pool of investments available to them from which to draw loss offsets), reducing the extent to which equalization enhances progressivity.
Clearly, the estate tax is at an extreme of progressivity, since the vast majority of taxpayers do not pay it at all.
In fact, it is simply a shift towards greater progressivity.
Instead, the focus should be on eliminating distortions that reduce both progressivity and the tax system's efficiency.The "carried-interest" loophole, which allows private-equity managers to pay (low) capital-gains rather than (higher) income tax on their earnings, is one such sore.
The real problem is the tendency for free-market capitalism, for all its advantages, to lead to increased income inequality, with the result that the masses are constrained in their spending.We need to reintroduce more progressivity into our tax and transfer systems, while still leaving incentives that require inequality in their rewards.
Tax progressivity is often at odds with efficiency.
Once you allow for the progressivity of public services, the OECD reckons, Sweden's Gini drops to 0.18.
This year's budget, due to be unveiled on March 4th, would be a good place to start.Progressive but perverseContrary to popular perception on the left, the main problem with America's tax code is not its lack of progressivity.
But it will be interesting to see whether the difficulty in attaining progressivity causes those concerned about inequality to begin to question the wisdom of taxing income in the first place.
