Political science is an ever-evolving field of study, in which key policy questions almost never remain constant over the years. One issue that has broken the trend and has been debated since the idea's inception is income tax. Nearly a century after many major nations first adopted the concept, it is still as divisive an issue, if not more so, than it was in the past. Some ideologies believe in higher taxes to provide a strong welfare system, others prefer low taxes with only essential welfare systems, and still others want to abolish it altogether calling it “theft”. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay In late 2017, President Trump and congressional Republicans in the United States passed a sweeping tax cut that sharply divided public opinion. In other areas of the developed world, taxes have risen to over 50% and have remained there for many years. Others have chosen to attract investment without ever adopting an income tax. Many right-wing politicians argue that lower taxes lead to more spending and therefore more growth, while left-wing politicians believe that higher taxes, especially on the rich, can lead to a fairer system that allows more people to have success and lead a better life with less income and wealth. inequality. This seemingly endless debate continues to impact human lives and thus the need for objective research continues. When looking at the end goal of politics or even society in general, many argue that leading a happy life is the most important goal that people should work towards. Safe. While others may respond to freedom or rights, lasting happiness is often impossible without the security of these concepts. Therefore, if we accept that happiness is the most important concept that a country should aim to achieve, it is also important to examine whether happier nations have a similar pattern of taxation and resulting income inequality. Therefore, the correlation between income tax rates and income inequality and happiness (as defined by the World Happiness Index) will be the focus of this research paper more specifically “What correlation (if any) do income taxes have and wealth inequality in relation to happiness? ?”Literature ReviewThe importance of the concept of happiness and the meaning of income tax rates may lead one to believe that a considerable amount of research has been conducted on the relationship between the two, however this is in fact not true. Much of the research conducted on the topic contains the relationship as a subfactor or simply as a footnote in the larger scheme of studies of happiness or taxation. Studies directly examining the relationship are quite recent, largely because the measurement of happiness itself has been rather patchy until the measurement that will be used in this study, which is the United Nations-backed report. By analyzing the available literature, I will discuss the information available in studies on the direct relationship between taxation and happiness, studies on the relative inequality of income and happiness, and challenges to the claim that happiness should be a goal of society and whether money/taxation also affects on the measurement. Since the association between income tax rates and happiness is the focus of the research paper, this aspect of the literature review is the most conservative, but should also be notedas relatively weak in terms of relevant literary sources. Dorrenberg and Peichl (2013) provided one of the strongest isolations of the variables taxation (albeit specifically progressive) and happiness. Their research revealed a measurable link between positive public morale and reduced tax evasion. They also discovered a link between progressive tax nations and lower tax evasion which, when concluded, can be extended to find that progressive tax nations actually show a higher level of morale or happiness. Other studies have found that the correlation between happiness and taxation is too large and needs to be reduced. One found a correlation between GDP per capita and happiness, but also discovered distinct age discrepancies during a study of Brazil (Graham, 2011). In Brazil, taxes were cut and as a result younger people tended to be less happy while older people tended to be happier as a result. It has also been noted that this is obviously aided by the fact that older people are likely to earn more than their younger counterparts and therefore subsequently pay more in a progressive tax system. Weisbach (2008) also reached similar conclusions, pointing out that a correlation was evident, but that this was strongly influenced by age and also by married status, which also affects tax rates in most countries. The largest study conducted on the topic is perhaps that of Alesina, Tella and McCulloch (2004). In their study, they also noted a correlation between taxation and happiness, but highlighted distinctive differences in the United States and Europe. The poor and left-wing politicians in Europe cared much more about progressive taxation and income inequality than their American counterparts. In another turnaround, the wealthy in the United States were more aware of these factors than their European counterparts. These reversals were strange and noteworthy because, although poor Europeans were more aware of inequality, they suffered from a less stark difference than poor Americans who were much less aware. They concluded that a likely cause of this difference lay in perceptions of economic mobility in which Americans felt they could more easily move from poverty to wealth while Europeans felt a greater sense of class stagnation. The second area of literature to examine is the similar area of wealth inequality which is linked to taxation both in that more progressive taxation has shown a correlation with lower wealth inequality and in that more progressive taxes are often used as a remedy to the problem of inequality of wealth or income. Sachs and Sanders (2017) look more at the numbers themselves rather than the correlation with happiness that they more or less presuppose. However, the figures provided are truly astonishing. They claim that the richest 1% own half the world's wealth, and in the United States the richest tenth of the richest percentage of the richest people own the same wealth as the bottom 90%. In the study covering a period between 2009 and 2014, new incomes went disproportionately to the wealthy, with 58% of new incomes in this period going to the richest 1% of Americans. This correlates with lower levels of life satisfaction, especially among millennials, as 37% of Americans in their 20s had student loan debt, and as taxes have become lower and less progressive since the 1950s, wealth inequality /income is at its worst level since the 1920s. While the previous study.
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