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- Title
FBBVA Lecture 2023. The Importance of Modeling Income Taxes over Time: U.S. Reforms and Outcomes.
- Authors
Borella, Margherita; Nardi, Mariacristina De; Pak, Michael; Russo, Nicolo; Yang, Fang
- Abstract
The structure of taxes and their burden have undergone large and frequent changes over time. We provide a brief history of U.S. federal income tax reform since the 1960s, calculate effective federal income tax rates for each wave of the Panel Study of Income Dynamics, and discuss how effective taxation changed from 1969 to 2016. We show that most tax regimes are short-lived and that the variation in taxes over time and across groups is large. We also use an estimated dynamic model of couples and singles to show that the various tax regimes that we estimate imply very different labor market and saving behavior. These findings stress the importance of studying and modeling tax changes over time and across groups.
- Subjects
INCOME tax rates &; tables; TAX incidence; PANEL analysis; INCOME tax
- Publication
Journal of the European Economic Association, 2023, Vol 21, Issue 6, p2237
- ISSN
1542-4766
- Publication type
Article
- DOI
10.1093/jeea/jvad053