Search Results
Showing results 1 to 10 of approximately 11.
(refine search)
Working Paper
Corporate Taxes and the Earnings Distribution: Effects of the Domestic Production Activities Deduction
This paper investigates how corporate tax changes affect workers’ earnings. We use a dataset of U.S. worker-level W-2 filings matched with corporate tax returns and study the implementation of the Domestic Production Activities Deduction (DPAD). We find the DPAD tax rate reduction has a substantial effect on the distribution of annual wage earnings within a firm. Earnings of workers at the top of their firm’s earnings distribution rise relative to those at the bottom of the distribution. We estimate a semi-elasticity of average earnings of 1.1 with respect to the DPAD marginal tax rate ...
Working Paper
Income and Earnings Mobility in U.S. Tax Data
We use a large panel of federal income tax data to investigate intragenerational income mobility in the United States. We have two primary objectives. First, we explore the determinants of two-year changes in individual labor earnings and family incomes, such as job or industry changes, marriage, divorce, and geographic mobility. Second, we evaluate how federal income taxes stabilize or destabilize post-tax income changes relative to pre-tax changes. We find a relatively high degree of income mobility, with almost half of workers exhibiting earnings increases or decreases of at least 25 ...
Working Paper
Whose Child Is This? Shifting of Dependents Among EITC Claimants Within the Same Household
Using a panel of household level tax data, we estimate the degree to which dependents are "reassigned" between tax units within households, and how these reassignments affect combined tax liabilities. Reassigning dependents reduces combined tax liabilities on average, suggesting some household level coordination. Additionally, when EITC benefits expanded in 2009, reassignments increasingly involved adding a third child to tax returns to claim these new benefits. However, the subgroup reassigning towards three child tax units actually increased total household tax liabilities, suggesting ...
Working Paper
The TCJA and Domestic Corporate Tax Rates
We study changes in tax positions for U.S. C corporations following passage of the 2017 tax legislation commonly known as the Tax Cuts and Jobs Act (TCJA). While existing research has focused primarily on publicly traded companies, data limitations have prevented more holistic analyses of the corporate sector. Using a representative sample of U.S. corporate tax returns, we highlight how trends in effective tax rates (ETRs) and exposure to the legislation’s main provisions varied for public, private, multinational, domestic, and large versus small firms. We document several novel facts, ...
Working Paper
Earnings Shocks and Stabilization During COVID-19
This paper documents the magnitude and distribution of U.S. earnings changes during the COVID-19 pandemic and how fiscal relief offset lost earnings. We build panels from administrative tax data to measure annual earnings changes. The frequency of earnings declines during the pandemic were similar to the Great Recession, but the distribution was very different. In 2020, workers starting in the bottom half of the distribution were more likely to experience large annual earnings declines and a similar share of male and female workers had large earnings declines. While most workers experiencing ...
Discussion Paper
Income Declines During COVID-19
The COVID-19 pandemic caused regressive income declines, but also led to progressive policy responses. Using administrative U.S. tax data, which are a near-universal panel dataset that can track income changes over time, we consider the distribution of annual income declines during the COVID-19 pandemic relative to the Great Recession.
Working Paper
Earnings Business Cycles: The Covid Recession, Recovery, and Policy Response
Using a panel of tax data, we follow the earnings of individuals over business cycles. Compared to prior recessions, the Covid policy response and recovery were far more progressive. Among workers starting in the bottom quintile, median real earnings including fiscal relief increased 66 percent in 2020 and earnings increases offset relief decreases in the 2021 recovery. After the prior two recessions, this measure had decreased by 24 percent. Among those starting in the top quintile, median and average real earnings were approximately unchanged. This difference from prior recessions is ...
Working Paper
Earnings Business Cycles: The Covid Recession, Recovery, and Policy Response
Using a panel of tax data, we follow the earnings of individuals over business cycles. Compared to prior recessions, the Covid policy response and recovery were far more progressive. Among workers starting in the bottom quintile, median real earnings including fiscal relief increased 66 percent in 2020 and earnings increases offset relief decreases in the 2021 recovery. After the prior two recessions, this measure had decreased by 24 percent. Among those starting in the top quintile, median and average real earnings were approximately unchanged. This difference from prior recessions is ...
Discussion Paper
Unemployment Insurance in Survey and Administrative Data
Unemployment Insurance (UI) benefits were a central part of the social safety net during the Covid-19 recession. UI benefits, however, are severely understated in surveys. Using administrative tax data, we find that over half of UI benefits were missed in major survey data, with a greater understatement among low-income workers. As a result, 2020 official poverty rates were overstated by about 2 percentage points, and corrected poverty reached a six-decade low. We provide data to correct underreporting in surveys and show that, compared to UI benefits, the UI exclusion tax expenditure was ...
Working Paper
Earnings Business Cycles: The Covid Recession, Recovery, and Policy Response
Using a panel of tax data, we follow the earnings of individuals over business cycles. Compared to prior recessions, the Covid policy response and recovery were far more progressive. Among workers starting in the bottom quintile, median real earnings including fiscal relief increased 66 percent in 2020 and earnings increases offset relief decreases in the 2021 recovery. After the prior two recessions, this measure had decreased by 24 percent. Among those starting in the top quintile, median and average real earnings were approximately unchanged. This difference from prior recessions is ...