Tax rates can affect decisions regarding work, investment in human capital, and wealth accumulation, each of which modulates intra- and intergenerational economic mobility. Similarly, government spending affects mobility either by purchasing goods that may drive mobility, such as education and health, or by effectively lowering the cost of mobility-enhancing goods through tax deductions and credits. This review summarizes the literature on the effects of government tax and spending policy on economic mobility, with a focus on the impacts of changes in marginal tax rates, the tax treatment of wealth, and government spending on health care, education, and Social Security. (Review 10 of 11.)
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