Effective Federal Tax Rates and Income Distribution
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.