ASSESSING THE WELFARE IMPACT OF TAX REFORM: A CASE STUDY OF THE 2001 U.S. TAX CUT |
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Authors: | JULIE L HOTCHKISS ROBERT E MOORE FERNANDO RIOS‐AVILA |
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Institution: | 1. Federal Reserve Bank of Atlanta, and Andrew Young School of Policy Studies, Georgia State University;2. Andrew Young School of Policy Studies, Georgia State University |
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Abstract: | This paper implements a relatively simple methodological approach to estimate the impact on family welfare of a specific tax reform. The measured impact can differ greatly from simple marginal tax rate comparisons, and conclusions about the distribution of the welfare impact can vary depending on the basis of comparison. For example, absolute welfare gains from the 2001 U.S. tax reform were concentrated among the highest and lowest income families, whereas welfare gains measured as a share of pre‐tax income are found to be nearly monotonically declining in income. |
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Keywords: | H23 H31 J22 household welfare joint labor supply tax reform |
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