Black-White Differences in Income Tax Liability

William Gale, Oliver Hall and John Sabelhaus

AEA Papers and Proceedings, 2026, vol. 116, 658-663

Abstract: The federal income tax does not explicitly discriminate by race or ethnicity but can still generate disparate outcomes when a group’s activity correlates with determinants of tax liability. Using Survey of Consumer Finances data and NBER’s TAXSIM model, we find that untaxed forms of income accrue disproportionately to White households across most income levels. Black households face lower tax rates than Whites in low-income groups due to differences in filing status and dependents but face higher rates than White units in high-income groups due to differences in income composition. We also examine cross-group implications of historical and prospective policy changes.

JEL-codes: G51 H24 J15 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/pandp.20261128 (application/pdf)
https://doi.org/10.7910/DVN/PTBWZT (text/html)
https://www.aeaweb.org/articles/materials/25341 (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

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:aea:apandp:v:116:y:2026:p:658-663

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/subscribe.html

DOI: 10.1257/pandp.20261128

Access Statistics for this article

AEA Papers and Proceedings is currently edited by William Johnson and Kelly Markel

More articles in AEA Papers and Proceedings from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().