Tax progressivity and income inequality in the US

Joao Jalles and Georgios Karras

Economics Letters, 2024, vol. 238, issue C

Abstract: Using a novel data set on US tax progressivity constructed by Borella et al. (2023), we estimate its short- to medium-term dynamic effects on US income inequality since 1970. By means of local projections, we find that an increase in tax progressivity reduces the Gini index implying a reduction in income inequality. Our estimates suggest that the effect is gradual but sizeable, statistically significant (at its peak, but not during all years evaluated), and robust to controlling for the tax rate.

Keywords: Tax progressivity; Tax rates; Gini; Time series; Local projections (search for similar items in EconPapers)
JEL-codes: C22 E62 H20 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176524001988
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524001988

DOI: 10.1016/j.econlet.2024.111715

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().