The potential effects of personal income tax in USA in 2007

Abstract

Article presents the effects of the potential introduction of the flat tax for the United States economy in 2007. The USA is labelled as the most capitalist economy worldwide. This is confirmed through a lot of economic indicators and ideological bases which rule in the USA. Nevertheless, all over the history progressive income taxes have functioned in American economy against the views of extreme capitalist theorists. Even that hasn’t protected America from huge income inequality. Lots of inequality indicators for the USA are the worst among other developed countries. As statistic data reveal, the introduction of the flat taxation in personal taxes would result in the increase of the population income inequality. The aim of this paper is to present direct and static effects of the introduction of the flax tax on personal taxes in the Unites States in 2007. The main emphasis is on income and inequality effects of that change. The analysis is carried out with descriptive and statistical methods.