Working Paper: NBER ID: w22580
Authors: Don Fullerton; Nirupama S. Rao
Abstract: We assess the concentration and duration of zero tax liabilities and of transfer receipts, using data for households with ten to forty years of observations from the Panel Survey of Income Dynamics. We find that neither is strongly concentrated. Nearly 68% owe no federal tax in at least one year, approximately 78% receive some type of transfer in at least one year, and more than 58% receive transfers other than Social Security in at least one year. Of those who do not owe federal tax in any given year, 18% pay tax the following year, and 39% contribute within five years. Of those who receive transfers other than Social Security within a given year, nearly 44% stop receiving such transfers the next year, and more than 90% stop within ten years.
Keywords: No keywords provided
JEL Codes: H2; H5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| not paying federal income tax (H26) | receiving transfers (H87) |
| government policies (H59) | chronic dependency (I12) |
| not paying federal income tax (H26) | paying tax next year (H26) |
| not paying federal income tax (H26) | contributing within five years (D64) |
| receiving transfers (H87) | stopping transfers next year (H87) |
| receiving transfers (H87) | stopping transfers within ten years (F16) |