IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/7525.html
   My bibliography  Save this paper

The Income and Tax Share of Very High Income Households, 1960-1995

Author

Listed:
  • Daniel R. Feenberg
  • James M. Poterba

Abstract

This paper presents new information on the fraction of adjusted gross income, and of wages and salaries, that is reported by taxpayers in the top one half of one percent of the income distribution. This corresponds to roughly five hundred thousand households in the late 1990s. This paper relies on data from the Treasury's Individual Income Tax Model for the period 1960-1995. The definition of adjusted gross income is standardized, so that changes in the tax law do not affect the measured concentration of AGI. The results suggest that the share of AGI reported by the highest income households increased significantly between the early 1980s and the mid-1990s, with most of the increase taking place in the years immediately following the Tax Reform Act of 1986. While we find some evidence of transitory changes in the concentration of income around major tax changes, which may be the result of income retiming by high income taxpayers, re-timing does not seem to explain most of the changes since 1986.

Suggested Citation

  • Daniel R. Feenberg & James M. Poterba, 2000. "The Income and Tax Share of Very High Income Households, 1960-1995," NBER Working Papers 7525, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7525
    Note: PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w7525.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Austan Goolsbee, 2000. "Taxes, High-Income Executives, and the Perils of Revenue Estimation in the New Economy," American Economic Review, American Economic Association, vol. 90(2), pages 271-275, May.
    2. Feldstein, Martin & Poterba, James M. (ed.), 1996. "Empirical Foundations of Household Taxation," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226240978.
    3. Daniel R. Feenberg & James M. Poterba, 1993. "Income Inequality and the Incomes of Very High-Income Taxpayers: Evidence from Tax Returns," NBER Chapters,in: Tax Policy and the Economy, Volume 7, pages 145-177 National Bureau of Economic Research, Inc.
    4. Roger H. Gordon & Joel Slemrod, 1998. "Are "Real" Responses to Taxes Simply Income Shifting Between Corporate and Personal Tax Bases?," NBER Working Papers 6576, National Bureau of Economic Research, Inc.
    5. Joel Slemrod & Jon Bakija, 2000. "Does Growing Inequality Reduce Tax Progressivity? Should It?," NBER Working Papers 7576, National Bureau of Economic Research, Inc.
    6. Brian J. Hall & Jeffrey B. Liebman, 1998. "Are CEOs Really Paid Like Bureaucrats?," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 653-691.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marcelo Medeiros, 2006. "The Rich and the Poor: The Construction of an Affluence Line from the Poverty Line," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 78(1), pages 1-18, August.
    2. Huang, Ho-Chuan (River) & Fang, WenShwo & Miller, Stephen M. & Yeh, Chih-Chuan, 2015. "The effect of growth volatility on income inequality," Economic Modelling, Elsevier, vol. 45(C), pages 212-222.
    3. Emmanuel Saez & Michael R. Veall, 2003. "The Evolution of High Incomes in Canada, 1920-2000," Quantitative Studies in Economics and Population Research Reports 382, McMaster University.
    4. José Mª Durán Cabré & Alejandro Esteller Moré, 2007. "An empirical analysis of wealth taxation: Equity vs. tax compliance," Working Papers 2007/1, Institut d'Economia de Barcelona (IEB).
    5. Shahateet, Mohammed & Al-Tayyeb, Saud, 2007. "Regional consumption inequalities in Jordan: Empirical study," MPRA Paper 57400, University Library of Munich, Germany.
    6. Bach, Stefan & Corneo, Giacomo & Steiner, Viktor, 2012. "Optimal top marginal tax rates under income splitting for couples," European Economic Review, Elsevier, vol. 56(6), pages 1055-1069.
    7. Stefan Bach & Giacomo Corneo & Viktor Steiner, 2013. "Effective Taxation of Top Incomes in Germany," German Economic Review, Verein für Socialpolitik, vol. 14(2), pages 115-137, May.
    8. Emmanuel Saez, 2004. "Reported Incomes and Marginal Tax Rates, 1960-2000: Evidence and Policy Implications," NBER Chapters,in: Tax Policy and the Economy, Volume 18, pages 117-174 National Bureau of Economic Research, Inc.
    9. Ugo Troiano, 2017. "Do Taxes Increase Economic Inequality? A Comparative Study Based on the State Personal Income Tax," NBER Working Papers 24175, National Bureau of Economic Research, Inc.
    10. Chiara Binelli, 2008. "Returns to Education and Increasing Wage Inequality in Latin America," Working Paper series 30_08, Rimini Centre for Economic Analysis.
    11. Jonathan A. Schwabish, 2006. "Earnings Inequality and High Earners: Changes During and after the Stock Market Boom of the 1990s: Working Paper 2006-06," Working Papers 17738, Congressional Budget Office.

    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:7525. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Joanne Lustig). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.