Six Tax Laws Later: How Individuals’ Marginal Federal Income Tax Rates Changed between 1980 and 1995

16 Pages Posted: 19 Jul 2014

See all articles by Leonard E. Burman

Leonard E. Burman

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

William G. Gale

Brookings Institution

David Weiner

Government of the United States of America - Congressional Budget Office (CBO)

Date Written: September 1998

Abstract

We examine the evolution of marginal federal income tax rates from 1980 to 1995 using panel and crosssectional data. Marginal rates fell dramatically for most taxpayers. Whereas in 1980 three-quarters of taxpayers faced statutory tax rates above 15 percent, less than one-quarter of taxpayers were in that situation in 1995. Individuals’ tax rates also rose and fell due to life-cycle changes in income. Young people (age 30 to 44) were twice as likely to experience tax rate increases as older taxpayers. Nonetheless, the majority of taxpayers in every age group experienced rate reductions. The large marginal tax rate cuts in 1981 and 1986 clearly dominate life-cycle effects.

Keywords: federal income tax, marginal tax rates, tax policy

JEL Classification: H2

Suggested Citation

Burman, Leonard E. and Gale, William G. and Weiner, David, Six Tax Laws Later: How Individuals’ Marginal Federal Income Tax Rates Changed between 1980 and 1995 (September 1998). National Tax Journal, Vol. 51, No. 3, 1998. Available at SSRN: https://ssrn.com/abstract=2467623

Leonard E. Burman

Tax Policy Center ( email )

Urban Institute
2100 M Street NW
Washington, DC 20009
United States
2022615742 (Phone)

Maxwell School ( email )

400 Eggers Hall
Syracuse, NY 13244
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Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
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Syracuse University - Center for Policy Research ( email )

Syracuse, NY 13244
United States

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

David Weiner

Government of the United States of America - Congressional Budget Office (CBO) ( email )

Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515
United States
202-226-2689 (Phone)

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