Table 1 - Response of taxes to a uniform change in income

This is a second update with four additional years of data and many corrections to Figure 1 from "The Significance of Federal Taxes as Automatic Stabilizers" by Alan J. Auerbach and Daniel Feenberg, published in The Journal of Economic Perspective Vol 14 no 3 (Summer 2000). From page 41:

Figure 1 presents four versions of the normalized tax change for each year in our sample period. To calculate each value, we carried out a hypothetical experiment in which we increase all income and income-related deduction items on each tax return by 1 percent, meant to simulate a 1 percent change in aggregate income spread neutrally across the population. Then, we add together all the individual tax changes and divide by the sum of assumed income changes for that year. The result is the ratio of aggregate change in taxes to the aggregate change in income.

A more detailed description is available in the paper or in the working paper version .

Comments or questions are welcome at the email address below.

Daniel Feenberg
feenberg isat nber dotte org

Last revised 7 May 2008 by drf