Did Tax Reform Reduce Actual U.S. Progressivity?: Evidence from the Taxpayer Compliance Measurement Program

INTERNATIONAL TAX AND PUBLIC FINANCE, Vol. 4, No. 2

Posted: 6 May 1997

See all articles by John A. Bishop

John A. Bishop

East Carolina University - College of Business

K. Victor Chow

West Virginia University

John P. Formby

University of Alabama - Department of Economics, Finance and Legal Studies

Chih-Chin Ho

U.S. Internal Revenue Service

Abstract

Micro data from audited tax returns are used to evaluate changes in the actual progressivity of U.S. federal income taxes in 1979 and 1988, which is distinct from apparent progressivity. Statistical inference methods are applied to global measures of both actual and apparent residual and liability progression. The analysis reveals an absence of change in the overall level of actual residual progressivity but statistically significant declines in actual liability progression. The results indicate that in assessing overall tax progression it is important to take sampling errors into account and that measures of actual tax progressivity can deviate significantly from apparent progressivity.

JEL Classification: H23, H26

Suggested Citation

Bishop, John A. and Chow, K. Victor and Formby, John P. and Ho, Chih-Chin, Did Tax Reform Reduce Actual U.S. Progressivity?: Evidence from the Taxpayer Compliance Measurement Program. INTERNATIONAL TAX AND PUBLIC FINANCE, Vol. 4, No. 2, Available at SSRN: https://ssrn.com/abstract=4877

John A. Bishop

East Carolina University - College of Business ( email )

Department of Economics
Greenville, NC 27858-4353
United States

K. Victor Chow

West Virginia University ( email )

College of Business and Economics P.O. Box 6025
Morgantown, WV 26506-6025
United States

John P. Formby (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-8667 (Phone)
205-348-0590 (Fax)

Chih-Chin Ho

U.S. Internal Revenue Service ( email )

1111 Constitution Avenue, NW
Washington, DC 20224
United States

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