Friday, October 4, 2013

Roberts on Tax Brackets: A Historical Perspective

Tracey Michelle Roberts (Seattle University School of Law) has posted "Brackets: A Historical Perspective." It is forthcoming in the Northwestern University Law Review (2014). Here's the abstract:
This article surveys the history of the U.S. income tax system from 1913 to the present, examining changes in the structure of the graduated rates system over the past 100 years, using inflation-adjusted dollars. The article connects these changes to key events in the history of the United States and examines recent proposals for reform in light of those prior structures and history. First, the article demonstrates that the rate structure has become more flat (with lower rates and fewer brackets than in the past), compressed (with less graduation, steeper jumps between brackets, and less penetration of the rate schedule into the income strata), and complex (with the proliferation of tax expenditures) over time. Second, the article argues that the structures that would result from several tax reform proposals being discussed in the popular media resemble historical rates and brackets. Because these proposals for tax reform have analogs in earlier versions of the income tax, analysis of economic data from prior periods may help inform tax policy. The article then identifies an agenda for future research. Finally, the article argues that tax scholars examining the impacts of various tax policy proposals should supplement their existing scholarship with methodologies that incorporate historic data to provide a more complete analysis.
The full article is available here, at SSRN.