Replication data for: The Incentive Effects of Marginal Tax Rates: Evidence from the Interwar Era

Principal Investigator(s): View help for Principal Investigator(s) Christina D. Romer; David H. Romer

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Project Citation:

Romer, Christina D., and Romer, David H. Replication data for: The Incentive Effects of Marginal Tax Rates: Evidence from the Interwar Era. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114869V1

Project Description

Summary: This paper uses the interwar United States as a laboratory for investigating the incentive effects of marginal income tax rates. We examine the impact of the large changes in rates in this period on taxable income using time-series/cross-section analysis of data by small slices of the income distribution. We find that the effect operated in the expected direction but was economically small, and that it is precisely estimated and highly robust. We also find suggestive time-series evidence of a positive impact of marginal rate cuts on business formation, but no evidence of an important effect on other indicators of investment.

Scope of Project

JEL Classification:
      D31 Personal Income, Wealth, and Their Distributions
      H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
      H31 Fiscal Policies and Behavior of Economic Agents: Household
      M13 New Firms; Startups
      N42 Economic History: Government, War, Law, International Relations, and Regulation: U.S.; Canada: 1913-

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V1 [2019-10-13]

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