While “‘Tis impossible to be sure of any thing but Death and Taxes,” Bullock (1716), the structure of taxes and their burden have undergone large and frequent changes over time. In this talk, De Nardi provides a brief history of U.S. federal income tax reforms since the 1960s, calculates effective federal income tax rates for each wave of the Panel Study of Income Dynamics, and discusses how effective taxation changed from 1969 to 2016.
De Nardi shows that most tax regimes are short-lived and that the variation in taxes over time and across groups is large. She also uses an estimated dynamic model of couples and singles to show that the various tax regimes that we estimate imply very different labor market and saving behavior. These findings stress the importance of studying and modeling tax changes over time and across groups.