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Computing State Average Marginal Income Tax Rate: An Application to Missouri

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  • G. Dean Crader

    (Department of Economics, University of Missouri-Columbia)

  • Joseph H. Haslag

    (Department of Economics, University of Missouri-Columbia)

Abstract

Using filing-level data, we compute the average marginal income tax rate for the State of Missouri. We have data from 2000 through 2015. We start with a simple experiment: consider the effect that a $10 change in federal adjusted gross income would have on each filer’s tax payment. We find that with deductions, exemptions, and credits, the average marginal income tax rate has been remarkably steady over the years, ranging from 3.50 percent to 3.66 percent. This rate is much lower than the top marginal income tax rate, which has been 6 percent for taxable income greater than $9,000 for the entire sample period. In addition, we compute the average marginal income tax rate for different types of income in order to compare directly with the NBER’s reported state rate.

Suggested Citation

  • G. Dean Crader & Joseph H. Haslag, 2017. "Computing State Average Marginal Income Tax Rate: An Application to Missouri," Working Papers 1711, Department of Economics, University of Missouri.
    • Handle: RePEc:umc:wpaper:1711
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    average marginal tax rate; individual income; MOSIM;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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