TY - JOUR
T1 - Distributional effects of the 2001 and 2003 tax cuts
T2 - How do financing and behavioral responses matter?
AU - Elmendorf, Douglas W.
AU - Furman, Jason
AU - Gale, William G.
AU - Harris, Benjamin H.
PY - 2008/9
Y1 - 2008/9
N2 - We reexamine the distributional effects of the 2001 and 2003 tax changes, incorporating two factors omitted in standard distributional estimates: the financing of the tax changes, and the implications of behavioral responses for both after-tax income and other aspects of well-being. Using the standard methodology, most people are made better off by the tax cuts, with the biggest percentage and absolute gains in after-tax income received by high-income households. Using our novel methodology for "dynamic distributional analysis," a large majority of households are made worse off by the tax cuts, especially in the lower three income quintiles.
AB - We reexamine the distributional effects of the 2001 and 2003 tax changes, incorporating two factors omitted in standard distributional estimates: the financing of the tax changes, and the implications of behavioral responses for both after-tax income and other aspects of well-being. Using the standard methodology, most people are made better off by the tax cuts, with the biggest percentage and absolute gains in after-tax income received by high-income households. Using our novel methodology for "dynamic distributional analysis," a large majority of households are made worse off by the tax cuts, especially in the lower three income quintiles.
UR - http://www.scopus.com/inward/record.url?scp=57749175290&partnerID=8YFLogxK
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U2 - 10.17310/ntj.2008.3.02
DO - 10.17310/ntj.2008.3.02
M3 - Article
AN - SCOPUS:57749175290
SN - 0028-0283
VL - 61
SP - 365
EP - 380
JO - National Tax Journal
JF - National Tax Journal
IS - 3
ER -