@article{3e275dd9b91f424e8d880a5bc07dee7a,
title = "Tax progressivity and income inequality in the US",
abstract = "Using a novel data set on US tax progressivity constructed by Borella et al. (2023), we estimate its short- to medium-term dynamic effects on US income inequality since 1970. By means of local projections, we find that an increase in tax progressivity reduces the Gini index implying a reduction in income inequality. Our estimates suggest that the effect is gradual but sizeable, statistically significant (at its peak, but not during all years evaluated), and robust to controlling for the tax rate.",
keywords = "Gini, Local projections, Tax progressivity, Tax rates, Time series",
author = "Jalles, {Jo{\~a}o Tovar} and Georgios Karras",
note = "Funding Information: The authors are grateful to an anonymous referee for useful comments and suggestions. They also acknowledge financial support from FCT \u2013 Funda\u00E7\u00E3o para a Ci\u00EAncia e Tecnologia (Portugal), national funding through research grants UIDB/05069/2020 and UIDB/ 04521/2020. The opinions expressed herein are those of the authors and do not necessarily reflect those of the authors\u2019 employers. Any remaining errors are the authors\u2019 sole responsibility. Publisher Copyright: {\textcopyright} 2024 Elsevier B.V.",
year = "2024",
month = may,
doi = "10.1016/j.econlet.2024.111715",
language = "English",
volume = "238",
journal = "Economics Letters",
issn = "0165-1765",
publisher = "Elsevier",
}
