Choose a particular tax policy that is in place or could be proposed. Explain why this tax policy is a good thing or not. Give specific details on the implications of such a policy.
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Additionally, progressive tax improves the spending power of the economy. Low-income households often live under difficult financial situations that do not allow them to experience the value of their income. Limberg (2019) notes that with the progressive tax, higher-income earners contribute higher taxes that boost economic growth and deter recession. This allows low-income households to stretch their spending more. A progressive tax is also ‘paid as you go,’ meaning that individuals are taxed when they earn money. In case of job loss, they have no tax burdens to cater to. One of the effects of a progressive tax is that it allows more households,
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