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Effective Marginal Tax Rates Under the Federal Individual Income Tax: Death by One Thousand Pin Pricks?

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  • Barthold, Thomas A.
  • Koerner, Thomas
  • Navratil, John F.

Abstract

The federal personal income tax has six statutory marginal tax rates: zero, 15 percent, 28 percent, 31 percent, 36 percent, and 39.6 percent. Because of the design of certain provisions of the Internal Revenue Code, an effective marginal tax rate may not always correspond to the statutory marginal tax rate. Recently, the staff of the Joint Committee on Taxation prepared a report identifying those provisions that cause a taxpayer's effective marginal tax rate to differ from his statutory marginal tax rate. This paper summarizes that study and discusses the consequences of these provisions on the efficiency, equity and complexity of the federal individual income tax.

Suggested Citation

  • Barthold, Thomas A. & Koerner, Thomas & Navratil, John F., 1998. "Effective Marginal Tax Rates Under the Federal Individual Income Tax: Death by One Thousand Pin Pricks?," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 553-564, September.
    • Handle: RePEc:ntj:journl:v:51:y:1998:i:3:p:553-64
    DOI: 10.1086/NTJ41789350
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    References listed on IDEAS

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    1. Robert K. Triest, 1990. "The Effect of Income Taxation on Labor Supply in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 25(3), pages 491-516.
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    1. David Altig & Alan J. Auerbach & Laurence J. Kotlikoff & Elias Ilin & Victor Ye, 2020. "The Marginal Net Taxation of Americans’ Labor Supply," NBER Working Papers 27164, National Bureau of Economic Research, Inc.
    2. Burman, Leonard E. & Gale, William G. & Weiner, David, 1998. "Six Tax Laws Later: How Individuals' Marginal Federal Income Tax Rates Changed Between 1980 and 1995," National Tax Journal, National Tax Association, vol. 51(n. 3), pages 637-52, September.
    3. Andrew Mitrusi & James M. Poterba, 2001. "The Changing Importance of Income and Payroll Taxes on US Families," NBER Chapters, in: Tax Policy and the Economy, Volume 15, pages 95-120, National Bureau of Economic Research, Inc.
    4. Burman, Leonard E. & Gale, William G. & Weiner, David, 1998. "Six Tax Laws Later: How Individuals' Marginal Federal Income Tax Rates Changed Between 1980 and 1995," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 637-652, September.
    5. Rosanne Altshuler & Robert D. Dietz, 2008. "Tax Expenditure Estimation and Reporting: A Critical Review," NBER Working Papers 14263, National Bureau of Economic Research, Inc.
    6. Rosanne Altshuler & Robert Dietz, 2008. "Reconsidering Tax Expenditure Estimation: Challenges And Reforms," Departmental Working Papers 200804, Rutgers University, Department of Economics.
    7. Altshuler, Rosanne & Dietz, Robert, 2011. "Reconsidering Tax Expenditure Estimation," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 459-489, June.

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