Tax Policy and Income Inequality

The video discusses income inequality in the US, highlighting the role of the tax code in exacerbating this issue. It explains how certain tax deductions, like charitable and mortgage interest deductions, disproportionately benefit the wealthy. The video also covers the preferential tax rate for capital gains, which favors unearned income over earned income. Historical perspectives, such as Reagan's tax reforms, are used to illustrate the impact of tax policies on economic growth. The video critiques proposed tax changes by Trump and Republicans, suggesting they would widen the wealth gap.

What is one of the major factors contributing to income inequality in the US?

• Decline in technology

• Decrease in CEO pay

• US tax code

• Increase in union membership

How does the charitable deduction favor the wealthy?

• It provides equal tax savings for all income levels

• It is not a significant factor in tax savings

• It offers more tax savings to those in higher tax brackets

• It is only available to those earning below $30,000

What is a potential alternative to the charitable deduction to make it fairer?

• Replace it with a tax credit

• Increase the deduction amount

• Eliminate all deductions

• Limit it to donations above $1,000

Which countries have eliminated deductions for charitable contributions without affecting donation rates?

• Brazil and Argentina

• United States and Canada

• Austria and Finland

• China and Japan

What is the primary benefit of the mortgage interest deduction?

• It reduces the cost of renting

• It is only applicable to first-time homebuyers

• It helps low-income families buy homes

• It provides significant tax savings to wealthy homeowners

What is the impact of the mortgage interest deduction on the US Treasury?

• It costs the Treasury about $100 billion a year

• It saves the Treasury money

• It generates revenue for the Treasury

• It has no impact on the Treasury

Which type of income is taxed at a lower rate according to the US tax code?

• Earned income

• Unearned income

• Both are taxed equally

• None of the above

What was a significant change in tax policy during Ronald Reagan's presidency?

• All tax rates were decreased

• All tax rates were increased

• Capital income and labor income were taxed at the same rate

• Capital income and labor income were taxed at different rates

What is a key feature of the proposed tax code changes by Trump and Republicans?

• Increase in tax rates for capital income

• Reduction in the number of tax brackets

• Increase in the number of tax brackets

• Elimination of all deductions

How would the proposed tax changes affect the gap between the rich and the rest?

• It would have no effect

• It would narrow the gap

• It would eliminate the gap

• It would widen the gap