Marginal Tax Rates and Income Inequality in a Life-Cycle Model

Charles Carlstrom and David Altig

American Economic Review, 1999, vol. 89, issue 5, 1197-1215

Abstract: In this paper we study the quantitative impact of marginal tax rates on the distribution of income. Our methodology builds on computable general-equilibrium framework. We find that distortions from marginal tax rate changes of the sort implied by the Tax Reform Act of 1986 have sizable effects on income inequality in a reasonably quantified life-cycle setting: In our model rate changes alone capture half the increase in the pretax Gini that actually occurred between 1984 and 1989.

JEL-codes: D31 H23 H31 (search for similar items in EconPapers)
Date: 1999
Note: DOI: 10.1257/aer.89.5.1197
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.89.5.1197 (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Marginal tax rates and income inequality in a life-cycle model (1996)
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:aecrev:v:89:y:1999:i:5:p:1197-1215

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

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

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