IDEAS home Printed from https://ideas.repec.org/a/wly/jpamgt/v12y1993i1p9-43.html
   My bibliography  Save this article

State and federal tax equity: Estimates before and after the Tax Reform Act of 1986

Author

Listed:
  • Marcus C. Berliant

    (Associate Professor of Economics, University of Rochester)

  • Robert P. Strauss

    (Professor of Economics and Public Policy, Carnegie-Mellon University)

Abstract

The progressivity and equity of both state and federal individual income taxes, as well as the combined system of both taxes, are examined before and after the federal Tax Reform Act of 1986 using a variety of measures applied to federal Statistics of Income individual income tax data; state taxes are calculated using TAXSIM. Our findings are as follows: First, in both 1985 and 1987, state personal income taxes were generally less progressive and more horizontally equitable than the federal system. Second, in moving from 1985 to 1987, state personal income tax systems generally displayed decreased progressivity and horizontal inequity. The combination of the two systems displayed generally lower progressivity and horizontal equity scores when we compare 1987 to 1985. Last, the after-tax income distribution became more unequal when we compared 1987 to 1985.

Suggested Citation

  • Marcus C. Berliant & Robert P. Strauss, 1993. "State and federal tax equity: Estimates before and after the Tax Reform Act of 1986," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 9-43.
    • Handle: RePEc:wly:jpamgt:v:12:y:1993:i:1:p:9-43
    DOI: 10.2307/3325456
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/3325456
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.2307/3325456?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jenkins, Stephen P., 1988. "Empirical measurement of horizontal inequity," Journal of Public Economics, Elsevier, vol. 37(3), pages 305-329, December.
    2. Fields, Gary S & Fei, John C H, 1978. "On Inequality Comparisons," Econometrica, Econometric Society, vol. 46(2), pages 303-316, March.
    3. Anthony F. Shorrocks & James E. Foster, 1987. "Transfer Sensitive Inequality Measures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 485-497.
    4. Ebert, Udo, 1987. "Size and distribution of incomes as determinants of social welfare," Journal of Economic Theory, Elsevier, vol. 41(1), pages 23-33, February.
    5. King, Mervyn A, 1983. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," Econometrica, Econometric Society, vol. 51(1), pages 99-115, January.
    6. repec:bla:revinw:v:21:y:1975:i:3:p:309-21 is not listed on IDEAS
    7. Plotnick, Robert, 1981. "A Measure of Horizontal Inequity," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 283-288, May.
    8. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    9. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    10. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
    11. Mervyn A. King, 1980. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," NBER Working Papers 0468, National Bureau of Economic Research, Inc.
    12. Yaakov Kondor, 1975. "Value Judgements Implied By The Use Of Various Measures Of Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 21(3), pages 309-321, September.
    13. Blackorby, Charles & Donaldson, David, 1980. "A Theoretical Treatment of Indices of Absolute Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 107-136, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel H. Cooper & Byron F. Lutz & Michael G. Palumbo, 2011. "Quantifying the role of federal and state taxes in mitigating income inequality," Public Policy Discussion Paper 11-7, Federal Reserve Bank of Boston.
    2. Daniel H. Cooper & Byron F. Lutz & Michael G. Palumbo, 2012. "Quantifying the role of federal and state taxes in mitigating wage inequality," Finance and Economics Discussion Series 2012-05, Board of Governors of the Federal Reserve System (U.S.).
    3. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berliant, Marcus & Strauss, Robert P., 2008. "Distributional analysis of prospective 2009 US individual income taxes: current law and the candidates’ tax plans," MPRA Paper 11221, University Library of Munich, Germany.
    2. Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2003. "Classical Horizontal Inequity and Reranking: an Integrating Approach," Cahiers de recherche 0306, CIRPEE.
    3. Juan Gabriel Rodríguez & Rafael Salas & Irene Perrote, 2005. "Partial Horizontal Inequity Orderings: A Non‐parametric Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(3), pages 347-368, June.
    4. Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2000. "Classical Horizontal Inequity and Reranking: an Integrated Approach," Cahiers de recherche 0002, Université Laval - Département d'économique.
    5. Christos Koutsampelas & Panos Tsakloglou, 2011. "Short-run distributional effects of public education in Greece," University of Cyprus Working Papers in Economics 12-2011, University of Cyprus Department of Economics.
    6. Satya R. Chakravarty & Pietro Muliere, 2003. "Welfare indicators: A review and new perspectives. 1. Measurement of inequality," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 457-497.
    7. Stephen P. Jenkins & Philippe Van Kerm, 2006. "Trends in income inequality, pro-poor income growth, and income mobility," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 531-548, July.
    8. Peter Lambert & Thor Thoresen, 2009. "Base independence in the analysis of tax policy effects: with an application to Norway 1992–2004," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(2), pages 219-252, April.
    9. Erlend Bø & Peter Lambert & Thor Thoresen, 2012. "Horizontal inequity under a dual income tax system: principles and measurement," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(5), pages 625-640, October.
    10. Ivica Urban & Peter J. Lambert, 2008. "Redistribution, Horizontal Inequity, and Reranking," Public Finance Review, , vol. 36(5), pages 563-587, September.
    11. Sorger, Gerhard & Stark, Oded, 2013. "Income redistribution going awry: The reversal power of the concern for relative deprivation," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 1-9.
    12. Rolf Aaberge, 2009. "Ranking intersecting Lorenz curves," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(2), pages 235-259, August.
    13. Satya Chakravarty, 2001. "The Variance as a subgroup decomposable measure of inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 53(1), pages 79-95, January.
    14. repec:cte:werepe:2907 is not listed on IDEAS
    15. Rafael Salas, "undated". "Convergencia, movilidad y redistribución interregional en Espana: 1981-1996," Studies on the Spanish Economy 40, FEDEA.
    16. Foster, James E. & Shneyerov, Artyom A., 2000. "Path Independent Inequality Measures," Journal of Economic Theory, Elsevier, vol. 91(2), pages 199-222, April.
    17. Claudio Zoli, 2002. "Inverse stochastic dominance, inequality measurement and Gini indices," Journal of Economics, Springer, vol. 77(1), pages 119-161, December.
    18. Alan J. Auerbach & Kevin A. Hassett, 2002. "A New Measure of Horizontal Equity," American Economic Review, American Economic Association, vol. 92(4), pages 1116-1125, September.
    19. Bibi, Sami & Duclos, Jean-Yves, 2007. "Equity and policy effectiveness with imperfect targeting," Journal of Development Economics, Elsevier, vol. 83(1), pages 109-140, May.
    20. Anthony B. Atkinson & Andrea Brandolini, 2010. "On Analyzing the World Distribution of Income," The World Bank Economic Review, World Bank, vol. 24(1), pages 1-37, January.
    21. Satya R. Chakravarty, 2009. "Equity and efficiency as components of a social welfare function," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 181-199, June.

    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:wly:jpamgt:v:12:y:1993:i:1:p:9-43. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/34787/home .

    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.