This paper compares the steady state outcomes of revenue-neutral changes to the progressivity of the tax schedule. Our economy features heterogeneous households who differ in their preferences and permanent labor productivities, but it does not have idiosyncratic risk. We find that increases in...

In addition to taxing future consumption (including leisure), capital income taxation subsidizes the consumption of durables. the taxation of future consumption may be characterized as an intertemporal distortion, while the subsidy to durables may be characterized as a static distortion. the...

A presentation of computational counterfactual experiments that examine the quantitative impact of marginal tax rates on the distribution of income.

Contributing to 401(k)-type plans lowers current taxes, but does it lower lifetime taxes? If tax rates were independent of income and remained constant through time, the answer would be an unambiguous “yes.” But tax rates may be higher when retirement account withdrawals occur, either...

A presentation of a large-scale, dynamic simulation model for comparing the equity, efficiency, and macroeconomic effects of five alternatives to the current U.S. federal income tax: a proportional income tax, a proportional consumption tax, a flat tax, a flat tax with transition relief, and a...

This paper quantifies the steady-state aggregate, distributional, and mobility effects of switching the U.S. to a proportional income tax system.

This paper examines the degree of income tax progressivity chosen through a simple majority vote in a model with savings. Households have permanent differences with respect to their labor productivity and their discount factors. The government has limited commitment to future policy, so voting...

An Auerbach-Kotlikoff (AK) overlapping-generations model is used to examine how changes in marginal income-tax rate structures affect the distribution of income, drawing on actual changes to the U.S. tax code. This approach builds on AK by allowing for many different cohort types, and hence for...

An examination of the inflation-indexing provisions contained in the Economic Recovery Tax Act of 1981 and the Tax Reform Act of 1986.

An examination, using the overlapping-generations approach, of how the interactions between inflation and the nominal taxation of capital income affect the cyclical behavior of the U.S. economy.