RT Journal Article
SR Electronic
T1 Household Incomes in Tax Data
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 600
OP 631
DO 10.3368/jhr.56.2.0718-9647R1
VO 56
IS 2
A1 Larrimore, Jeff
A1 Mortenson, Jacob
A1 Splinter, David
YR 2021
UL http://jhr.uwpress.org/content/56/2/600.abstract
AB A limitation of tax return data is the inability to identify members of separate tax units living in the same household. We overcome this obstacle and present the first set of entirely tax-based household income and inequality measures. We find using tax units as a proxy for households overstates household income inequality, as measured by Gini coefficients, by 13 percent. Consistent with previous findings, we also estimate that the CPS understates household income inequality by 5 percent. Compared to conventional tax-unit measures, the federal income tax code and earned income tax credit are less progressive when measured at the household level.