Federal Income Tax Structure Redistributes Wealth, Equalizes Income Distribution
The Federal Income Tax has different components that affect how income is distributed. Exemptions help make income more equal after taxes, especially as their levels increase. Deductions, on the other hand, can make income distribution less equal, except for the standard deduction. Overall, exemptions have a bigger impact on income redistribution than deductions. The tax rate structure also plays a role in making income distribution more equal after taxes.