Distributional Effects of Defined Contribution Plans and Individual Retirement Arrangements

57 Pages Posted: 5 Feb 2011

See all articles by William G. Gale

William G. Gale

Brookings Institution

Peter R. Orszag

Lazard Asset Management

Leonard E. Burman

Tax Policy Center; Maxwell School; Urban Institute; Syracuse University - Center for Policy Research

Matthew Hall

affiliation not provided to SSRN

Date Written: 2004

Abstract

This paper incorporates retirement saving incentives into the Tax Policy Center microsimulation model and analyzes the distributional effects of current tax preferences for saving. As a share of income, tax-preferred saving incentives provide the largest benefits to households with income between $75,000 and $500,000, roughly the 80th to 99th percentile of the income distribution. In 2004, the top 20 percent of tax filing units by income will receive 70 percent of the tax benefits from new contributions to defined contribution plans and almost 60 percent of IRA tax benefits.

Keywords: retirement savings, taxes

JEL Classification: J26

Suggested Citation

Gale, William G. and Orszag, Peter R. and Burman, Leonard E. and Hall, Matthew, Distributional Effects of Defined Contribution Plans and Individual Retirement Arrangements (2004). National Tax Journal, Vol. 57, No. 3, 2004. Available at SSRN: https://ssrn.com/abstract=1754638

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
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Peter R. Orszag

Lazard Asset Management ( email )

30 Rockefeller Plaza
New York, NY 10112
United States

Leonard E. Burman

Tax Policy Center ( email )

Urban Institute
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Washington, DC 20009
United States
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Maxwell School ( email )

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Syracuse, NY 13244
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Urban Institute ( email )

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Washington, DC 20037
United States
202-261-5248 (Phone)

Syracuse University - Center for Policy Research ( email )

Syracuse, NY 13244
United States

Matthew Hall

affiliation not provided to SSRN ( email )

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