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Title:Tax policy and income inequality in the US, 1978 - 2009: A decomposition approach PDF Logo
Authors:Bargain, Olivier
Dolls, Mathias
Immervoll, Herwig
Neumann, Dirk
Peichl, Andreas
Pestel, Nico
Siegloch, Sebastian
Issue Date:2011
Series/Report no.:Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5910
Abstract:We assess the effects of U.S. tax policy reforms on inequality by applying a new decomposition method that allows us to disentangle mechanical effects due to changes in pre-tax incomes from direct effects of policy reforms. While tax reforms implemented under Democrat administrations, in particular the EITC reforms in the 1990s and the ARRA in 2009, had an equalizing effect at the lower half of the distribution, the disequalizing effects of Republican reforms are due to tax cuts for high-income families. As a consequence of partisan politics, overall policy effects almost cancel out over the whole time period.
Subjects:tax policy
inequality
redistribution
political economy
Great Recession
JEL:H23
H31
H53
P16
Persistent Identifier of the first edition:urn:nbn:de:101:1-201108173942
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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