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Who Pays Taxes? A Dynamic Perspective

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  • Bradley T. Heim
  • Ithai Z. Lurie
  • James Pearce

Abstract

This paper examines income and payroll tax payments using a panel of individual income tax returns from 2001–2011. Over that time, the share of families paying positive income taxes decreased from 62 to 53 percent, and the share of individuals fell from 69 to 62 percent. Including payroll taxes increases the share of individuals paying positive taxes in 2011 to 71 percent, but does not alter the trend. Across years, positive tax liability is more persistent than non-payment or negative liability. Finally, across a five-year window, 13 percent of individuals paid positive taxes in no year, while 20 percent had a zero or negative tax liability on average.

Suggested Citation

  • Bradley T. Heim & Ithai Z. Lurie & James Pearce, 2014. "Who Pays Taxes? A Dynamic Perspective," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(4), pages 755-778, December.
    • Handle: RePEc:ntj:journl:v:67:y:2014:i:4:p:755-778
    DOI: 10.17310/ntj.2014.4.01
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    References listed on IDEAS

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    1. Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 72-101, July.
    2. Leigh Andrew, 2010. "Who Benefits from the Earned Income Tax Credit? Incidence among Recipients, Coworkers and Firms," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-43, May.
    3. Kubik, Jeffrey D., 2004. "The incidence of personal income taxation: evidence from the tax reform act of 1986," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1567-1588, July.
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    Cited by:

    1. Bradley T. Heim & Ithai Z. Lurie, 2015. "The Impact of Health Reform on Job Mobility: Evidence from Massachusetts," American Journal of Health Economics, University of Chicago Press, vol. 1(3), pages 374-398, Summer.
    2. Jeff Larrimore & Jacob Mortenson & David Splinter, 2021. "Household Incomes in Tax Data: Using Addresses to Move from Tax-Unit to Household Income Distributions," Journal of Human Resources, University of Wisconsin Press, vol. 56(2), pages 600-631.
    3. Don Fullerton & Nirupama Rao, 2016. "The Lifecycle of the 47%," CESifo Working Paper Series 6051, CESifo.
    4. Elin Halvorsen & Thor O. Thoresen, 2021. "Distributional Effects of a Wealth Tax under Lifetime‐Dynastic Income Concepts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 184-215, January.

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