The Distribution of Payroll and Income Tax Burdens, 1979-1999
AbstractThis paper presents new evidence on the level and distribution of income and payroll tax burdens for U.S. families over the 1979-1999 period. During this period, payroll taxes have become an increasingly important component of the tax burden for many low- and middle-income families. This paper uses a new and expanded version of the NBER TAXSIM program to analyze the impact of legislative changes in income and payroll taxes. Averaged over all families, the combined 1999 payroll and income tax burden was quite similar to what it would have been if the 1979 income and payroll tax laws had remained in force for the last two decades, with only inflation-based adjustments to tax brackets. The mix of income and payroll taxes has changed, however. As a result of the expansion of the Earned Income Tax Credit in the late 1980s and early 1990s, as well as other changes in the federal personal income tax, payroll tax liabilities now exceed income tax liabilities for nearly two thirds of families. In 1979, payroll taxes exceeded income taxes for 44 percent of families.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7707.
Date of creation: May 2000
Date of revision:
Publication status: published as Mitrusi, Andrew and James Poterba. "The Distribution Of Payroll And Income Tax Burdens," National Tax Journal, 2000, v53(3,Sep), Part 2, 765-794.
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Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-05-22 (All new papers)
- NEP-HIS-2000-05-22 (Business, Economic & Financial History)
- NEP-LAB-2000-05-22 (Labour Economics)
- NEP-PBE-2000-05-22 (Public Economics)
- NEP-PUB-2000-05-22 (Public Finance)
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