Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991-2004

Chamberlain, Andrew; Prante, Gerald

doi:10.2139/ssrn.976507

Cited by 15 publications

(13 citation statements)

References 39 publications

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“…The empirical evidence on the effective degree of progressivity of state and local taxes offers a mixed picture. Chamberlain and Prante (2007) find a moderate degree of progressivity across the first four quintiles of the income distribution, with mild regressivity setting in at the top end. By contrast, Davis et al (2009) conclude that there is a considerable degree of regressivity in practice.…”

Section: B Average Share In All Federal Taxesmentioning

confidence: 84%

Inequality and Poverty in the United States

Denk

Hagemann

Lenain

et al. 2013

OECD Economics Department Working Papers

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Inequality and poverty in the United States: public policies for inclusive growth Income inequality and relative poverty in the United States are among the highest in the OECD and have substantially increased over the past decades. These developments have been associated with a number of other worrying statistics, including low intergenerational social mobility and weak real income growth for many households. A more inclusive pattern of growth would require less pronounced gaps in outcomes and opportunities across social groups and a broader sharing of the benefits of growth. The present paper analyses the causes of US income inequality and relative poverty in an OECD context, especially the role of the tax-and-transfer system, and suggests public policies to promote inclusive growth. To a significant degree, high income inequality is attributable to the large dispersion of earned income, which should be addressed by reforming education, so as to provide disadvantaged students with the skills needed to fully realise their potential. In addition, taxes and transfers contribute less to income redistribution than in other OECD countries. If well designed, reforms that promote inclusive growth could also help reduce the market distortions resulting from the current tax-and-transfer system. In particular, phasing out personal and corporate tax expenditures that disproportionately benefit high earners would lower income inequality and improve resource allocation. As well, social transfers could be more effective in alleviating poverty through better targeting of the truly needy while reducing administrative complexity.

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Section: B Average Share In All Federal Taxesmentioning

confidence: 84%

Inequality and Poverty in the United States

Denk

Hagemann

Lenain

et al. 2013

OECD Economics Department Working Papers

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“…However, sales taxes are not nearly regressive enough to offset distributional consequences of school spending. The Tax Foundation estimates that the bottom quintile pays 2.56 percent of its income in the general sales tax, while the top quintile pays 1.94 percent (Chamberlain & Prante :42, Table 16), a difference of 0.62 percentage points. In contrast, the difference in estimated school finance spending as a fraction of income at the 20th and 80th percentiles is 4.09 percentage points, far greater than the 0.62 percentage point difference for the sales tax, since—though sales taxes are regressive—well‐off families do spend more and pay more sales tax, while they do not receive any more school funding.…”

Section: Discussionmentioning

confidence: 99%

Are Court Orders Sticky? Evidence on Distributional Impacts from School Finance Litigation

Liscow¹

2018

J Empirical Legal Studies

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Whether welfare analysis of legal rule changes should evaluate distributional outcomes as well as efficiency depends crucially on how much their distributional impacts stick. That is, do court mandates ultimately affect the distribution of taxes and spending or do legislatures offset the distributional consequences of those court orders with other changes? Little is known about this question. To offer insight into it, I use an event study methodology to show how state revenues and expenditures respond to court orders to increase funding for schools. I find that the court orders' distributional impacts do stick. The education spending is financed by tax increases that do not target the largest beneficiaries of the increased education spending, the poor and those with children. Thus, since the main beneficiaries of the school spending do not pay a disproportionate share of the costs, advocates for school finance reform are effective at transferring resources to poor families. The results suggest that welfare analysis of these legal rules should take into account not only efficiency but also distribution, in a departure from traditional economic analysis of legal rules.

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“…State individual income taxes, which accounted for 21 percent of state and local revenues in 2010, are much less progressive than the federal individual income tax because the rate structures for state-level income taxes are fl atter than those at the federal level and any refundable credits are small. Thus, though different analysts have reached different conclusions about whether state and local taxes on net are proportional, progressive, or regressive, they are clearly less progressive than the federal tax system (Phares 1980;Pechman 1985;Chamberlain and Prante 2007;and ITEP 2009). Consequently, analysis of the entire tax system would show less progressivity than analysis of the federal tax system alone.…”

Section: State and Local Taxesmentioning

confidence: 99%