Charts of the Week: Taxes

FILE PHOTO: FILE PHOTO: A tax sign is pictured on an H&R Block tax office in Los Angeles, California, April 26, 2017. REUTERS/Mike Blake/File Photo - RC1E7F4A2B00

In this week’s Charts of the Week we are recognizing the week of tax day in the U.S. by looking at tax proposals to increase female workforce participation, views on the wealth tax, and the problem of tax evasion.

A secondary-earner tax credit increases female workforce participation

Discussing the earning gap between men and women, Ryan Nunn writes that “the gap between women’s and men’s earnings is even larger when measured after taxes.” Joint taxation of household income suppresses women’s labor force participation and devalues their work. A secondary-earner tax credit would raise the returns of many secondary earners, who are mainly women, encouraging their labor force participation.

women after-tax income from $30,000 job, by spouse's earnings and presence of children

A majority of Americans favor Senator Warren’s wealth tax idea

As economic inequality rises, politicians are offering more proposals to diminish income inequality. Many of these proposals include raising taxes the wealthy. Isabel Sawhill and Christopher Pulliam demonstrate that a majority of Americans favor such taxes, particularly Senator Elizabeth Warren’s wealth tax, including 50 percent of Republicans.

Tax evasion rates are higher for high-income households

Looking at tax evasion in the U.S., both direct and inadvertent, William Gale and Aaron Krupkin find that it occurs more often in high-income households than in lower-income households. This varies on the different kinds of taxes that are being collected, but the trend remains true for all categories. “People who evade taxes are not just cheating the government,” Gale and Krupkin argue, “they are also stealing from their neighbors who are following tax laws and regulations.”

Julia O’Hanlon contributed to this post.