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- (http://academic.udayton.edu/SPPQ-TPR/klarner_datapage.html, accessed at January 15th, 2013). ADA Average is from Anderson and Habel (2009). State economic variables. The series on direct policy eects as well as post-tax inequality measures result from own calculations based on SOI IRS income tax return data and NBER TAXSIM calculator. Data on state per capita personal income, farm and manufacturing share is provided by the Bureau of Economic Analysis.
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- [b] OASDI: Old-Age, Survivors, and Disability Insurance program [c] HI: Medicare's Hospital Insurance program [d] The upper limit on earnings subject to HI was repealed by the Omnibus Budget Reconciliation Act of 1993.
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- Figure 10: Comparison of policy eect on Gini SOI - CPS 1980 1981 1982 1983 1984 1985 1986 1987 1988 19891990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 20042005 2006 2007 1.25 1 .75 .5 .25 0 -.25 -.5 -.75 -1 PolicyeffectGini-CPS 1.251.75.5.250-.25-.5-.75-1 Policy effect Gini - SOI Sources: Own calculations based on SOI IRS income tax return data, CPS data and NBER TAXSIM calculator.
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- Figure 7: Income shares: Direct vs. total policy eect with low ETI 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 Relativetobaseyearinc.share(%) 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Direct policy ef f ect 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 Relativetobaseyearinc.share(%) 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Total policy ef f ect P20-40 P40-60 P60-80 P80-100 Note: P20-40: Second quintile, P40-60: Third quintile, P60-80: Fourth quintile. P80-100: The dashed vertical lines indicate the start of implementation of signi…cant changes in tax legislation (section 3.4). Shaded areas show recession periods (NBER classi…cation). ETI = 0.2. Uprating according to the level of price in‡ation. Sources: Own calculations based on SOI IRS income tax return data and NBER TAXSIM calculator.
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- Figure 8: Income shares: Direct vs. total policy eect with medium ETI 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 Relativetobaseyearinc.share(%) 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Direct policyeffect 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 Relativetobaseyearinc.share(%) 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Total policyeffect P20-40 P40-60 P60-80 P80-100 Note: P20-40: Second quintile, P40-60: Third quintile, P60-80: Fourth quintile. P80-100: The dashed vertical lines indicate the start of implementation of signi…cant changes in tax legislation (section 3.4). Shaded areas show recession periods (NBER classi…cation). ETI = 0.5. Uprating according to the level of price in‡ation. Sources: Own calculations based on SOI IRS income tax return data and NBER TAXSIM calculator.
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- Figure 9: Income shares with uprating according to mean nominal wage growth 30 25 20 15 10 5 0 -5 -10 -15 -20 -25 -30 Relativetobaseyearinc.share(%) 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Observed 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 Relativetobaseyearinc.share(%) 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Direct policyeffect P20-40 P40-60 P60-80 P80-100 Note: P20-40: Second quintile, P40-60: Third quintile, P60-80: Fourth quintile. P80-100: The dashed vertical lines indicate the start of implementation of signi…cant changes in tax legislation (section 3.4). Shaded areas show recession periods (NBER classi…cation). Uprating according to mean nominal wage growth. Sources: Own calculations based on SOI IRS income tax return data and NBER TAXSIM calculator.
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- For each income group, the indirect policy eect is calculated as a fraction of the total change in reported income from period t to t + 1: IPE = yS yt+1 yt OE (7) A.2 Additional results Table 3: Decomposition results for major tax reforms (a) ERTA81 data year: 1981 1984 1981 1984 Decomp. I Decomp. II Shapley-Dec.
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- Other state characteristics variables. State characteristics such as percent elderly, percent black, percent female and percent college-educated are based on information contained in IPUMS CPS. Data on union density is from Hirsch et al. (2001), with updates available on http://unionstats.gsu.edu/MonthlyLaborReviewArticle.htm (accessed at January 15th, 2013). Population density is provided by the Census Bureau.
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- Table 5: Robustness check: Ranking of taxunits, TRA86 data year: 1986 1988 1986 1988 Decomp. I Decomp. II Shapley-Dec.
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