Brief Estimating Marginal Tax Rates Using a Microsimulation Model
Linda Giannarelli, Kye Lippold, Elaine Maag, C. Eugene Steuerle, Nina Chien, Suzanne Macartney
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Effective marginal tax rates measure how a household’s material resources change as its earned income rises. For example, when a household’s earnings from work rise by $100, its net resources may rise by less than $100 as those earnings may be subject to payroll and federal, state, and local income taxes, and the size of any public assistance payments the household receives may fall. This paper describes our analysis of the effective marginal tax rates US households face incorporating how changes in income influence eligibility for and participation in public assistance programs as well as changes in work.
Research Areas Social safety net Taxes and budgets
Tags Families with low incomes Temporary Assistance for Needy Families (TANF) Welfare and safety net programs Supplemental Nutrition Assistance Program (SNAP) Housing subsidies Supplemental nutrition - Women, Infants, and Children (WIC) Individual taxes Earned income tax credit Hunger and food assistance
Policy Centers Income and Benefits Policy Center Urban-Brookings Tax Policy Center