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State and federal tax equity: Estimates before and after the Tax Reform Act of 1986
Author(s) -
Berliant Marcus C.,
Strauss Robert P.
Publication year - 1993
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.2307/3325456
Subject(s) - tax reform act , tax reform , equity (law) , economics , state income tax , public economics , direct tax , tax credit , economic policy , political science , gross income , law
The progressivity and equity of both state and federal individual income taxes, as well as the combined system of both taxes, are examined before and after the federal Tax Reform Act of 1986 using a variety of measures applied to federal Statistics of Income individual income tax data; state taxes are calculated using TAXSIM. Our findings are as follows: First, in both 1985 and 1987, state personal income taxes were generally less progressive and more horizontally equitable than the federal system. Second, in moving from 1985 to 1987, state personal income tax systems generally displayed decreased progressivity and horizontal inequity. The combination of the two systems displayed generally lower progressivity and horizontal equity scores when we compare 1987 to 1985. Last, the after‐tax income distribution became more unequal when we compared 1987 to 1985.