Is the Maximum Tax on Earned Income Effective?
The Tax Reform Act of 1969 included a provision intended to set at 50 percent the tax rate on all personal service income above the 50 percent bracket amount. The current law fails to meet this objective for the vast majority of these taxpayers. This paper explains why the current law is ineffective, simulates our current experience with the law using the National Bureau of Economic Research TAXSIM model, and considers options to the present law.
|Date of creation:||Jan 1981|
|Date of revision:|
|Publication status:||published as NTJ, Vol. 34, no. 2 (1981): 249-256.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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