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Working Paper
Is Our Fiscal System Discouraging Marriage? A New Look at the Marriage Tax
We develop, apply, and test a new measure of the marriage tax: the reduction in future spending from getting married. Our measure is a comprehensive, actuarial (expected) present value. It incorporates all major and most minor US tax and benefit programs, weighing the present value of additional net taxes from marrying along each marital survivor path by the path’s probability. And it assumes clone marriage—marrying oneself—to ensure the living-standard loss from marrying is unaffected by spousal choice. We calculate our marriage tax for young respondents using the Survey of Consumer ...
Journal Article
The baby boomers' mega-inheritance-myth or reality?
Retirees are one of the wealthiest segments of the U.S. population, and today's retirees have more wealth than any previous generation. Some have conjectured that bequests out of this wealth will significantly boost the resources of the baby boomers-the next generation of retirees-bridging the gap between their retirement needs and resources. This Economic Commentary argues against such a view and explains why boomers have no alternative but to save for their own retirement.
Working Paper
Does participating in a 401(k) raise your lifetime taxes?
Contributing to 401(k)-type plans lowers current taxes, but does it lower lifetime taxes? If tax rates were independent of income and remained constant through time, the answer would be an unambiguous ?yes.? But tax rates may be higher when retirement account withdrawals occur, either because one moves into higher marginal tax brackets or because the government raises tax rates. Moreover, reducing tax brackets when young in exchange for higher tax brackets when old renders mortgage deductions less valuable. Most importantly, shifting taxable income from youth to old age can substantially ...
Working Paper
Did the 2017 Tax Reform Discriminate against Blue State Voters?
The Tax Cut and Jobs Act of 2017 (TCJA) made significant changes to corporate and personal federal income taxation, including limiting the SALT (state and local property, income and sales taxes) deductibility to $10,000. States with high SALT tend to vote Democratic. This paper estimates the differential effect of the TCJA on red- and blue-state taxpayers and investigates the importance of the SALT limitation to this differential. We calculate the effect of permanent implementation of the TCJA on households using The Fiscal Analyzer: a life-cycle, consumption-smoothing program incorporating ...
Journal Article
Restoring generational balance in U.S. fiscal policy: what will it take?
A study of the magnitudes of tax increases, transfer cuts, or reductions in government purchases that would be needed to rectify the huge imbalance in the generational stance of U.S. fiscal policy, concluding that congressionally proposed outlay reductions in nondefense and non-Social Security spending would still be insufficient to bridge the gap.
Journal Article
The 1995 budget and health care reform: a generational perspective
A presentation of the baseline generational accounts for 1992, estimating both the effect of the Omnibus Budget Reconciliation Act of 1993 and the further impact of the Clinton administration's health reform proposal.
Working Paper
Generational accounts: a meaningful alternative to deficit accounting
A presentation of a set of generational accounts that can be used as an alternative to the federal budget deficit in assessing intergenerational policy, concluding that the fiscal burdens on future generations will be significantly larger than those on existing generations if current tax policy remains unchanged.
Working Paper
Gains from trade under uncertainty, once again
Working Paper
Simulating the transmission of wealth inequality via bequests
Answering the question of how much wealth inequality arises from inheritance inequality requires data that are unavailable and potentially uncollectable. The alternative approach taken here (from Blinder [1974, 1976] and Davies [1982]) is to simulate the transmission of inequality via bequests.