Topic: What is the historical relationship between U.S. federal income tax rates and levels of employment/unemployment?
Beyond starting with a graph that charts all federal income tax rates from inception to date and levels of employment/unemployment on the same chart, address each subtopic listed below. For each subtopic address it from the inception of federal income taxes in the U.S. to date for all times which are pertinent to your analysis and conclusions (ie., if the tax rates were the same for a decade but employment/unemployment levels changed materially that may be pertinent to your analysis and conclusions). And, for each subtopic make conclusions about what you think has been correct historically, now and most likely will be correct in the next 5 to 10 years:
- Is there a direct relationship between federal income tax rates and levels of employment/unemployment and, if so, how and why?
- What do differing state income tax rates (some states have none) tell you about the effect of higher or lower taxes on levels of employment/unemployment, why?
- Are federal income tax rates the most important determinant of levels of employment/unemployment, if so, how and why?
- If federal income tax rates are not the most important determinant of levels of employment/unemployment, what is and why?
- What other 3-6 factors are more, equally or less important than federal income tax rates in determining levels of employment/unemployment, how and why?
- To the extent youve concluded that federal income tax rates directly effect levels of employment/unemployment, what income tax rate, or rates, should be legislatively adopted if, hypothetically, the predominant goal of federal income tax rates was to maximize employment and minimize unemployment. What are your bases for proposing the federal income tax rate(s) you did?