Who Paid the Taxes, 1966-85?

Who Paid the Taxes, 1966-85?

Who Paid the Taxes, 1966-85?

Who Paid the Taxes, 1966-85?


Examines how the distribution of federal taxes has changed during the past twenty years, and indicates the share of the tax burden borne by each income class.


The distribution of tax burdens by income class is of major concern to the general public, political leaders, and social scientists, yet the information regarding this distribution is scanty. the lack of information is attributable to the difficulty of making such estimates and to the conceptual problems of deciding who actually pays the various taxes. Although the analytical framework used by tax economists has greatly improved in recent years, there are still significant differences of opinion about who bears the burden of the major components of modern tax systems.

To assist in understanding who pays the taxes, the Brookings Institution has sponsored a long-term statistical research program on the distribution of tax burdens based on a series of microdata sets especially designed for this type of analysis. These data sets were developed by merging the information from the annual current population surveys of the U.S. Bureau of the Census and the tax return samples of the Internal Revenue Service. When properly weighted, the incomes and taxes allocated to the sample units in these merge files aggregate to the national totals. the data base permits calculations of tax burdens on the basis of eight sets of incidence assumptions that span the range of opinion held by most economists.

The first results of this research program were published in 1974 in a Brookings book by Joseph A. Pechman andBenjamin A. Okner (Who Bears the Tax Burden?), which presented estimates of the distribution of federal, state, and local tax burdens in 1966. Since then, merge files have been developed for 1970 and 1975, and projections have been made from the 1975 file to 1980 and 1985. Thus it is now possible to trace the changes in the distribution of tax burdens over a period of almost two decades, from 1966 to 1985.

In a real sense this volume by Joseph A. Pechman is a sequel to Who Bears the Tax Burden? For many of the technical details on how the merge files are prepared, the interested reader is referred to the appendixes in the 1974 volume. Chapters 2 and 3 have been reproduced from the 1974 volume with only slight modifications.

Many talented and imaginative people contributed to this project. Two key . . .

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