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Introduction to "Empirical Foundations of Household Taxation"

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Introduction to "Empirical Foundations of Household Taxation" This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Empirical Foundations of Household Taxation Volume Author/Editor: Martin Feldstein and James Poterba, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-24097-5 Volume URL: http://www.nber.org/books/feld96-1 Conference Date: January 20-21, 1996 Publication Date: January 1996 Chapter Title: Introduction to "Empirical Foundations of Household Taxation" Chapter Author: Martin Feldstein, James M. Poterba Chapter URL: http://www.nber.org/chapters/c6234 Chapter pages in book: (p. 1 - 4) Introduction Martin Feldstein and James M. Poterba Tax policy debates depend critically on estimates of how alternative tax rules would affect household and firm behavior. Studies suggesting that reductions in marginal tax rates would increase household labor supply and saving were key components of the case for tax reform that resulted in the 198 1 Economic Recovery Tax Act. Research indicating that capital gain realizations were very sensitive to capital gains tax rates played a similar role in the 1978 capital gains tax reform. In the early 1990s, federal tax policy debates focused on a related question, the effect of raising marginal tax rates on household behavior and reported taxable income. Despite decades of interest in the effect of tax policy on household behavior, there remains substantial controversy on key empirical links between tax rates, household behavior, and revenue collections. The papers in this volume are the product of an ongoing NBER study of the effects of tax policies on household behavior. They present new statistical findings on how taxes affect household behavior or new analytical results on the effects of different types of tax policy. All of this research relies on household-level data, either drawn from public- use tax return files provided by

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