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Who Pays Taxes? A Dynamic Perspective


  • Bradley T. Heim
  • Ithai Z. Lurie
  • James Pearce


This paper examines income and payroll tax payments using a panel of individual income tax returns from 2001–2011. Over that time, the share of families paying positive income taxes decreased from 62 to 53 percent, and the share of individuals fell from 69 to 62 percent. Including payroll taxes increases the share of individuals paying positive taxes in 2011 to 71 percent, but does not alter the trend. Across years, positive tax liability is more persistent than non-payment or negative liability. Finally, across a five-year window, 13 percent of individuals paid positive taxes in no year, while 20 percent had a zero or negative tax liability on average.

Suggested Citation

  • Bradley T. Heim & Ithai Z. Lurie & James Pearce, 2014. "Who Pays Taxes? A Dynamic Perspective," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(4), pages 755-778, December.
  • Handle: RePEc:ntj:journl:v:67:y:2014:i:4:p:755-778

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    References listed on IDEAS

    1. Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 72-101, July.
    2. Leigh Andrew, 2010. "Who Benefits from the Earned Income Tax Credit? Incidence among Recipients, Coworkers and Firms," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-43, May.
    3. Kubik, Jeffrey D., 2004. "The incidence of personal income taxation: evidence from the tax reform act of 1986," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1567-1588, July.
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    Cited by:

    1. Bradley T. Heim & Ithai Z. Lurie, 2015. "The Impact of Health Reform on Job Mobility: Evidence from Massachusetts," American Journal of Health Economics, MIT Press, vol. 1(3), pages 374-398, Summer.
    2. Don Fullerton & Nirupama S. Rao, 2016. "The Lifecycle of the 47%," NBER Working Papers 22580, National Bureau of Economic Research, Inc.
    3. Elin Halvorsen & Thor Olav Thoresen, 2017. "Distributional Effects of the Wealth Tax under a Lifetime-Dynastic Income Concept," CESifo Working Paper Series 6614, CESifo Group Munich.
    4. Jeff Larrimore & Jacob Mortenson & David Splinter, 2017. "Household Incomes in Tax Data : Using Addresses to Move from Tax Unit to Household Income Distributions," Finance and Economics Discussion Series 2017-002, Board of Governors of the Federal Reserve System (U.S.).
    5. Don Fullerton & Nirupama Rao, 2016. "The Lifecycle of the 47%," CESifo Working Paper Series 6051, CESifo Group Munich.

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