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Six Tax Laws Later: How Individuals' Marginal Federal Income Tax Rates Changed Between 1980 and 1995

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  • Burman, Leonard E.
  • Gale, William G.
  • Weiner, David

Abstract

We examine the evolution of marginal federal income tax rates from 1980 to 1995 using panel and cross-sectional data. Marginal rates fell dramatically for most taxpayers. Whereas in 1980 three-quarters of taxpayers faced statutory tax rates above 15 percent, less than one-quarter of taxpayers were in that situation in 1995. Individuals’ tax rates also rose and fell due to life-cycle changes in income. Young people (age 30 to 44) were twice as likely to experience tax rate increases as older taxpayers. Nonetheless, the majority of taxpayers in every age group experienced rate reductions. The large marginal tax rate cuts in 1981 and 1986 clearly dominate life-cycle effects.

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  • Burman, Leonard E. & Gale, William G. & Weiner, David, 1998. "Six Tax Laws Later: How Individuals' Marginal Federal Income Tax Rates Changed Between 1980 and 1995," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 637-652, September.
    • Handle: RePEc:ntj:journl:v:51:y:1998:i:3:p:637-52
    DOI: 10.1086/NTJ41789358
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    1. Slemrod,Joel, 1997. "Tax Progressivity and Income Inequality," Cambridge Books, Cambridge University Press, number 9780521587761.
    2. Steven F. Venti & David A. Wise, 1990. "Have IRAs Increased U. S. Saving?: Evidence from Consumer Expenditure Surveys," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(3), pages 661-698.
    3. Barthold, Thomas A. & Koerner, Thomas & Navratil, John F., 1998. "Effective Marginal Tax Rates Under the Federal Individual Income Tax: Death by One Thousand Pin Pricks?," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 553-564, September.
    4. Barthold, Thomas A. & Koerner, Thomas & Navratil, John F., 1998. "Effective Marginal Tax Rates Under the Federal Individual Income Tax: Death by One Thousand Pin Pricks?," National Tax Journal, National Tax Association, vol. 51(n. 3), pages 553-64, September.
    5. David Bradford, 1995. "The Distributional Analysis of Tax Policy," Books, American Enterprise Institute, number 52866, September.
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    3. John Beshears & James J. Choi & David Laibson & Brigitte C. Madrian, 2014. "Who Uses the Roth 401(k), and How Do They Use It?," NBER Chapters, in: Discoveries in the Economics of Aging, pages 411-440, National Bureau of Economic Research, Inc.

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