Abstract: Paper No. 12

Estimating Federal Income Tax Burdens for Panel Study of Income Dynamics (PSID) Families Using the National Bureau of Economic Research TAXSIM Model

Barbara A. Butrica and Richard V. Burkhauser

December 1997

Abstract:  The Panel Study of Income Dynamics (PSID) staff no longer provide users with estimates of the federal income tax burden of PSID families. This paper describes an alternative method of estimating the federal income tax burden of families in the PSID using the National Bureau of Economic Research TAXSIM package with currently available PSID variables. We show that mean and median tax burdens for the PSID population using the TAXSIM package are similar to tax burden values supplied by the PSID staff from 1980 through 1991, the last year the PSID staff provided such information. The major source of difference between our estimates and those of the PSID staff appears to be related to our simplified assumption that all tax units take standard deductions. This assumption is necessary because the PSID no longer provides basic information on taxpayers who itemize deductions.

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