Why do low-income families use tax preparers? Q.Why do low-income families use tax preparers? A.Many low-income families owe no income tax but still must file a tax return to receive refundable tax credits, including the earned income tax credit. Those who do file often seek help, which nearly always comes from a paid preparer. The cost of that help erodes the net value of refundable credits. That cost might be worth bearing if preparers helped their clients claim tax benefits that otherwise might be missed, but many don’t. Read more about Why do low-income families use tax preparers?
How do taxes affect income inequality? Q.How do taxes affect income inequality? A.Because high-income households pay a larger share of their income in total federal taxes than low-income households, federal taxes reduce income inequality. But federal taxes have done little to offset increasing income inequality over the past 40 years. Read more about How do taxes affect income inequality?
Are federal taxes progressive? Q.Are federal taxes progressive? A.Overall, yes. But that’s not the case for each tax. Read more about Are federal taxes progressive?
