The Inherent Conflict Between Progressive Tax Rates and Income Inequality: Lessons from COVID-19 Restrictions

Nathan C. Goldman; Stephen J. Lusch; Gil Sadka

doi:10.2308/API-2022-006

The Inherent Conflict Between Progressive Tax Rates and Income Inequality: Lessons from COVID-19 Restrictions

Nathan C. Goldman, Stephen J. Lusch, Gil Sadka

Accountancy

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

We examine the relation between progressive tax rates, income inequality, and state income tax collections. We provide evidence that states with more progressive tax rate structures have higher tax collections. We then show an enhanced relation for states that enacted more stringent COVID-19 restrictions, which increased income inequality. Finally, we find that restrictions were more severe in states with more progressive tax rates. Our evidence sheds light on the inherent conflict between progressive tax structures and income inequality—income inequality increasing policies result in higher tax collections with a progressive tax system even though the latter aims to address income inequality.

Original language	English
Pages (from-to)	1-32
Number of pages	32
Journal	Accounting and the Public Interest
Volume	22
Issue number	1
DOIs	https://doi.org/10.2308/API-2022-006
State	Published - 2022

Bibliographical note

Publisher Copyright:
© 2022, American Accounting Association. All rights reserved.

Keywords

COVID-19
health economics
income inequality
political economy
progressive tax rates
state tax collections

ASJC Scopus subject areas

Accounting

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.2308/API-2022-006

Cite this

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The Inherent Conflict Between Progressive Tax Rates and Income Inequality: Lessons from COVID-19 Restrictions

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

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