Measuring the Average Marginal Tax Rate from the Individual Income Tax

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Measuring the Average Marginal Tax Rate from the Individual Income Tax

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Title: Measuring the Average Marginal Tax Rate from the Individual Income Tax
Author: Barro, Robert J.; Sahasakul, Chaipat

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Citation: Barro, Robert J., and Chaipat Sahasakul. 1983. Measuring the average marginal tax rate from the individual income tax. Journal of Business 56(4): 419-452.
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Abstract: The economic effects of taxation depend on the configuration of marginal tax rates. We consider here the appropriate measure of a marginal tax rate for the federal individual income tax, which has a graduated-rate structure and allows for numerous legal and illegal deductions from total income. Our conclusion is that the explicit marginal rate from the tax schedule is the right concept for many purposes. Hence, we construct approximately weighted averages of these marginal tax rates for 1916-80. When weighted by adjusted gross income, the arithmetic average of marginal tax rates is 5% in 1920, 2% in 1930, 6% in 1940, 20% in 1950, 23% in 1960, 24% in 1970, and 30% in 1980.
Published Version: doi:10.1086/296211
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:3451293
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