Tax Policy and Income Inequality in the United States, 1979-2007

Olivier Bargain (1) , Mathias Dolls (2, 3) , Herwig Immervoll , Dirk Neumann (4) , Andreas Peichl (2, 3, 5, 6) , Nico Pestel , Sebastian Siegloch (2, 3)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille
2 IZA
3 University of Cologne
4 SNSB - Zoologische Staatssammlung Muenchen
5 CESifo
6 ISER

This paper assesses the effects of U.S. tax policy reforms on inequality over around three decades, from 1979 to 2007. It applies a new method for decomposing changes in government redistribution into (1) a direct policy effect resulting from policy changes and (2) the effects of changing market incomes. Over the period as a whole, the tax policy changes increased income inequality by pushing up the income share of high-income earners (the top 20%). (JEL H23, H31, H53, P16)

Keywords: Economie quantitative

Domains: Humanities and Social Sciences; Humanities and Social Sciences; Economics and Finance

Olivier Bargain, Mathias Dolls, Herwig Immervoll, Dirk Neumann, Andreas Peichl, et al.. Tax Policy and Income Inequality in the United States, 1979-2007. Economic Inquiry, 2015, 53 (2), pp.1061--1085. ⟨10.1111/ecin.12172⟩. ⟨hal-01457384⟩