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Kozi Checks & Balances TaxTactics News

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September 18.2025

2 Minutes Read

Is the US Tax Code Fair? Examining Its Progressivity and Impacts

Spreadsheet and calculator detail for US tax code analysis.

Understanding the Fairness of the US Tax System

Is the US tax code fair? Many Americans think otherwise. According to a recent poll, about 65% of taxpayers believe it is not, with a significant portion feeling that higher earners should contribute more in taxes. This sentiment brings forward an important discussion about the progressivity of the tax code—essentially, how it impacts different income groups.

What Does Progressivity Mean?

A progressive tax system requires those with higher incomes to pay a larger percentage of their income in taxes compared to lower-income taxpayers. The opposite, a regressive tax system, places a heavier burden on those who earn less. In the US, the tax system is designed to be progressive, especially at the federal level where individual income tax plays a critical role. This means that as you earn more, you’re taxed at higher rates—making wealthier individuals contribute a larger share of total tax revenues.

Insights from Recent Data

Recent IRS data highlights that the top 50% of earners are responsible for 97% of federal income taxes, leaving only 3% for the bottom half. Moreover, lower-income individuals often benefit from refundable tax credits, which can result in negative effective tax rates, essentially giving them more in benefits than they pay in taxes. This reflects a genuinely progressive system where low-income families receive significantly more assistance than taxes they contribute.

Reinforcing Progressivity with Legislation

Recent changes in tax legislation, like those from the One Big Beautiful Bill Act (OBBBA), focus on maintaining the progressive nature of the tax code. While new additions were made, the structure that taxes higher earners more heavily remains intact. This is a reassurance for those advocating for tax reforms aimed at fairness.

Looking Ahead: The Future of Tax Progressivity

It is clear that the US tax code has evolved over the last century, becoming more progressive rather than less. Looking ahead, it’s vital for policymakers to consider how any new changes will affect this balance. Ensuring that fairness is preserved in tax policies that reflect the diverse economic backgrounds of taxpayers is essential for a harmonious society.

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Is the US Tax Code Fair? Examining Its Progressivity and Impacts

Understanding the Fairness of the US Tax System

What Does Progressivity Mean?

Insights from Recent Data

Reinforcing Progressivity with Legislation

Looking Ahead: The Future of Tax Progressivity

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