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Who Pays No Tax? The Declining Fraction Paying Income Taxes And Increasing Tax Progressivity

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  • David Splinter

Abstract

Using federal individual income tax data, this paper presents the first long‐run estimates of the fraction paying no income tax. Between 1985 and 2015, the fraction of working age adults paying no tax increased from 20% to 36%. A decomposition shows that almost all of this increase resulted from changes in tax policy, especially from more generous tax credits. Increasing tax progressivity over the last three decades also resulted from more generous tax credits. The substantial federal tax changes enacted in 2017 are forecasted to temporarily increase both the fraction paying no tax and individual income tax progressivity. (JEL H22, H24, H31)

Suggested Citation

  • David Splinter, 2019. "Who Pays No Tax? The Declining Fraction Paying Income Taxes And Increasing Tax Progressivity," Contemporary Economic Policy, Western Economic Association International, vol. 37(3), pages 413-426, July.
    • Handle: RePEc:bla:coecpo:v:37:y:2019:i:3:p:413-426
    DOI: 10.1111/coep.12407
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    References listed on IDEAS

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    Cited by:

    1. Jeff Larrimore & Jake Mortenson & David Splinter, 2020. "Presence and Persistence of Poverty in US Tax Data," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 383-409, National Bureau of Economic Research, Inc.
    2. David Splinter, 2022. "Income Mobility and Inequality: Adult‐Level Measures From the Us Tax Data Since 1979," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(4), pages 906-921, December.
    3. Bengtsson, Erik & Molinder, Jakob, 2024. "Incomes and income inequality in Stockholm, 1870–1970: Evidence from micro data," Explorations in Economic History, Elsevier, vol. 92(C).

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    More about this item

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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