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The Size Distribution of Income in an Income Tax Revenue Forecasting Model

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  • William C. Weiler

    (University of Minnesota)

Abstract

This paper presents a personal income tax revenue forecasting model which incorporates a functional specification of the entire size distribution of income estimated using aggregate data. The model is shown to yield substantially more accetrate forecasts for Minnesota than other revenue forecasting models which do not incorpocate a functional specification of the income distribution. Although the choice of arevenue forecasting model is somewhat subjective, our results indicate that the general approach of modeling the entire income distribution by a functional form is highly desirable in terms of forecast accuracy.

Suggested Citation

  • William C. Weiler, 1979. "The Size Distribution of Income in an Income Tax Revenue Forecasting Model," Public Finance Review, , vol. 7(2), pages 182-198, April.
    • Handle: RePEc:sae:pubfin:v:7:y:1979:i:2:p:182-198
    DOI: 10.1177/109114217900700204
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    References listed on IDEAS

    as
    1. Salem, A B Z & Mount, T D, 1974. "A Convenient Descriptive Model of Income Distribution: The Gamma Density," Econometrica, Econometric Society, vol. 42(6), pages 1115-1127, November.
    2. Thurow, Lester C, 1970. "Analyzing the American Income Distribution," American Economic Review, American Economic Association, vol. 60(2), pages 261-269, May.
    3. Mincer, Jacob, 1970. "The Distribution of Labor Incomes: A Survey with Special Reference to the Human Capital Approach," Journal of Economic Literature, American Economic Association, vol. 8(1), pages 1-26, March.
    4. Spahn, P Bernd, 1975. "Simulating Long-Term Changes of Income Distribution within an Income Tax Model for West Germany," Public Finance = Finances publiques, , vol. 30(2), pages 231-250.
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