Inflation, Taxation, and Low Income Groups.

The article discusses about inflation and taxation in relation to low-income groups. In spite of the great current need for more federal revenues and for measures to reduce inflationary pressures, and in spite of the insistence of many pressure groups and some highly respected economists' that taxes on the lower income groups be increased substantially, an excellent case can actually be made for exempting these groups from the increases voted in the Revenue Acts of 1950 and 1951. Besides facing objection on the grounds of its precipitating adverse revenue and inflationary effects, such a suggestion faces the additional criticism that the resulting further increase in the progressivity of the federal income tax would be an outright reform move unfairly undertaken during a period of national emergency. It is argued that further increases will destroy their incentives and hence throttle economic progress. Thus the case against tax increases, and specifically against greater progressivity in tax rates, is made primarily on economic, not ethical, grounds. The article also suggests some points for tax programs and represents it with the help of tables.