Top Marginal Effective Tax Rates by State and by Source of Income, 2012 Tax Law vs. 2013 Tax Law (as enacted in ATRA)

12 Pages Posted: 17 Nov 2012 Last revised: 22 Apr 2013

Gerald T. Prante

Lynchburg College, School of Business and Economics

Austin John

Lynchburg College, School of Business and Economics

Date Written: February 3, 2013

Abstract

This paper compares state-by-state estimates of the top marginal effective tax rates (METRs) on wages, interest, dividends, capital gains, and business income for tax year 2012 to the rates enacted into law for 2013 by the American Tax Relief Act of 2012 (ATRA). Overall, the average top METR on wage income increased by approximately six percentage points (41.8 percent to 47.9 percent), while taxes on dividends and capital gains increased by an average of 9.4 percentage points. The top METRs on wages, interest, and partnership/sole proprietor income now exceed 50 percent in California, Hawaii, and New York City.

Keywords: tax, marginal effective tax rate, fiscal cliff

JEL Classification: E62

Suggested Citation

Prante, Gerald T. and John, Austin, Top Marginal Effective Tax Rates by State and by Source of Income, 2012 Tax Law vs. 2013 Tax Law (as enacted in ATRA) (February 3, 2013). Available at SSRN: https://ssrn.com/abstract=2176526 or http://dx.doi.org/10.2139/ssrn.2176526

Gerald T. Prante (Contact Author)

Lynchburg College, School of Business and Economics ( email )

Lynchburg, VA 24501
United States

Austin John

Lynchburg College, School of Business and Economics ( email )

Lynchburg, VA 24501
United States

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