How Progressive is the U.S. Tax System?

45 Pages Posted: 29 Nov 2023 Last revised: 3 Dec 2023

See all articles by Thomas Coleman

Thomas Coleman

University of Chicago - Harris School of Public Policy

David A. Weisbach

University of Chicago - Law School

Date Written: November 20, 2023

Abstract

We examine changes in tax progressivity over time. Because there are many possible definitions of progressivity and because methods of defining and allocating income vary, we look for results that are robust across studies and definitions of progressivity. To do this, we compare the results from three different publicly available datasets, those from Piketty, Saez, and Zucman (2018), Auten and Splinter (2023) and Congressional Budget Office (2023). Notwithstanding some headline results to the contrary, all three datasets show that the tax system has become more progressive and more redistributive over the last several decades, with much of that change occurring in recent years. This increase in redistribution is driven primarily by an increase in transfers to households in the bottom half of the income distribution which is missed by a focus on the top 1%. A literature search for other studies confirms this result.

Keywords: progressivity, redistribution, inequality

JEL Classification: H20, H23

Suggested Citation

Coleman, Thomas and Weisbach, David, How Progressive is the U.S. Tax System? (November 20, 2023). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. #991, Available at SSRN: https://ssrn.com/abstract=4647122 or http://dx.doi.org/10.2139/ssrn.4647122

Thomas Coleman

University of Chicago - Harris School of Public Policy ( email )

1155 East 60th Street
Chicago, IL 60637
United States

David Weisbach (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-702-3342 (Phone)
773-702-0730 (Fax)

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