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Effective Federal Tax Rates and Income Distribution

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Between 1979 and 1997, effective tax rates dropped for all income levels. During this period, 15 legislative changes were enacted, affecting both tax rates and tax bases; income grew rapidly, especially at the upper end of the distribution. Demographic changes in household composition, notably the increasing share of childless non-elderly households, was another major cause of shifts in effective tax rates across income groups.

Suggested citation: "Effective Federal Tax Rates and Income Distribution," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-12, pp. 13, 12.01.2001.

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