Applied Math Seminar: Sarah Robinson (Claremont McKenna College)
March 10 @ 4:15 pm - 5:15 pm
Title: Do Taxes Affect Pre-Tax Income Inequality? Evidence from 100 Years of U.S. States
Abstract: We study how U.S. state taxes have affected pre-tax income inequality during the last century. Our primary analysis focuses on the top marginal personal income and corporate income tax, and their effect on top incomes and top income shares within each state. The long panel nature of our data, from 1917 to 2018, allows us to study the effect of tax adoptions, tax cancellations, and tax changes, and furthermore to assess both immediate and long-term relationships. With event study and synthetic control designs, we generally find no statistically significant relationship between tax measures and inequality. Some of our point estimates, as well as a simple two-way fixed effects analysis, suggest that higher income taxes may reduce top incomes and income shares.
