IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v73y2020i4p987-1004.html
   My bibliography  Save this article

Effective Tax Rates by Income and Wealth Class

Author

Listed:
  • Jesse Bricker
  • Kevin B. Moore
  • Sarah J. Reber
  • Alice Henriques Volz

Abstract

We use the Survey of Consumer Finances (SCF) from 1995 through 2016 to study trends in average effective tax rates across the income and wealth distribution. These average tax rates (ATRs) calculated from SCF income data are comparable to those calculated from external sources. We show that the wealthiest families have the highest ATRs, even as the income definition expands to include nontaxable sources and even though the wealthiest families are only sometimes among those with the highest annual income. However, the majority of income-producing assets held by the wealthiest are in the form of unrealized capital gains, effectively avoiding taxation. After altering the income concept to a measure of “potential income,” which incorporates changes in net worth and allows us to include untaxed increases in asset values, the wealthiest families no longer have the highest ATRs.

Suggested Citation

  • Jesse Bricker & Kevin B. Moore & Sarah J. Reber & Alice Henriques Volz, 2020. "Effective Tax Rates by Income and Wealth Class," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(4), pages 987-1004, December.
    • Handle: RePEc:ntj:journl:v:73:y:2020:i:4:p:987-1004
    DOI: 10.17310/ntj.2020.4.03
    as

    Download full text from publisher

    File URL: https://doi.org/10.17310/ntj.2020.4.03
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.17310/ntj.2020.4.03?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:73:y:2020:i:4:p:987-1004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.