More than they realize : the income of the wealthy Jenny Bourne, Eugene Steuerle, Brian Raub, Joseph Newcomb and Ellen Steele
Contributor(s): Bourne, Jenny
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Material type: 
ArticlePublisher: 2019Subject(s): INGRESOS FISCALES | IMPUESTOS | CAPITAL | RENTAS ALTAS | DECLARACIONES TRIBUTARIAS | ESTADOS UNIDOS
In:
National Tax Journal v. 71, n. 2, June 2018, p. 335-356Summary: Income realized for tax or survey purposes usually understates economic income for the wealthy because capital income recognition is often voluntary. Using estate tax returns filed in 2007 linked with income tax returns from 2002 to 2006, we find realized returns to capital for most wealthy individuals are less than 2 percent, with the richest filers reporting the lowest returns. Because of tax preferences, taxable returns are even smaller than reported returns. Consequently, studies relying upon realized income tend to overstate tax progressivity, understate income inequality, and miscalculate the distribution of wealth when derived through income-capitalization techniques.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
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| Artículos | IEF | IEF | OP 233/2018/2-5 (Browse shelf) | Available | OP 233/2018/2-5 |
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| OP 233/2018/2-2 The effect of flat tax rates on taxable income | OP 233/2018/2-3 Perceptions and realities of average tax rates in the federal income tax | OP 233/2018/2-4 Assessing the tax benefits of hybrid arrangements | OP 233/2018/2-5 More than they realize | OP 233/2018/3 National Tax Journal | OP 233/2018/3-1 Tax incidence in a vertical supply chain | OP 233/2018/3-2 The effects of IRS audits on EITC claimants |
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Income realized for tax or survey purposes usually understates economic income for the wealthy because capital income recognition is often voluntary. Using estate tax returns filed in 2007 linked with income tax returns from 2002 to 2006, we find realized returns to capital for most wealthy individuals are less than 2 percent, with the richest filers reporting the lowest returns. Because of tax preferences, taxable returns are even smaller than reported returns. Consequently, studies relying upon realized income tend to overstate tax progressivity, understate income inequality, and miscalculate the distribution of wealth when derived through income-capitalization techniques.
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