ABSTRACT
The distribution of income has always been a hotly debated subject. It should be pointed out that a significant change in the distribution of pre-tax income occurred during the Great Depression and the Second World War. Since one of the major objectives of taxation is to moderate income inequality, it is appropriate to ask how the tax system actually affects the distribution of income and whether it has become more or less equalising. The chapter examines the impact of the federal individual income tax, which is the most progressive element in the nation’s tax system and for which data by income classes are readily available annually, and then shows the effect of the other taxes in the system. It reviews some of the changes in the federal income tax. Some tax individuals, others tax the family, and still others permit taxpayers to make the selection.
