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The Lifecycle of the 47%

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  • Don Fullerton
  • Nirupama Rao

Abstract

We assess the concentration and duration of zero tax liabilities and of transfer receipts, using data for households with ten to forty years of observations from the Panel Survey of Income Dynamics. We find that neither is strongly concentrated. Nearly 68% owe no federal tax in at least one year, approximately 78% receive some type of transfer in at least one year, and more than 58% receive transfers other than Social Security in at least one year. Of those who do not owe federal tax in any given year, 18% pay tax the following year, and 39% contribute within five years. Of those who receive transfers other than Social Security within a given year, nearly 44% stop receiving such transfers the next year, and more than 90% stop within ten years.

Suggested Citation

  • Don Fullerton & Nirupama Rao, 2016. "The Lifecycle of the 47%," CESifo Working Paper Series 6051, CESifo.
    • Handle: RePEc:ces:ceswps:_6051
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    References listed on IDEAS

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    1. 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.
    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.
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    Cited by:

    1. Elin Halvorsen & Thor O. Thoresen, 2021. "Distributional Effects of a Wealth Tax under Lifetime‐Dynastic Income Concepts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 184-215, January.

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    More about this item

    Keywords

    taxation; transfers; social security; EITC; unemployment compensation; AFDC; TANF;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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