Volume 25, Number 4 (Fall) 1990
Chernick, Howard and Andrew Reschovsky. 1990. "The Taxation of the Poor." Journal of Human Resources 25(4):712-735.
This paper uses microsimulation modeling to estimate the annual burden of federal, state, and local taxes on the poor in two states. We find that in 1988 the average burden of taxation on poor families and individuals was 15.3 percent in Massachusetts and 18 percent in New York. As most of the burden is due to state and local taxes, federal tax reform had only a minor impact on the overall tax burdens faced by the poor. Though the analysis is for two state, we argue that the basic results are applicable for most other states. Given the high incidence of persistent poverty among those who are poor in any given year, we argue that annual burdens provide a good indication of long-run burden for a significant proportion of the poor.
Howard Chernick is a professor of economics at Hunter College and Andrew Reschovsky is a visiting professor of economics and public affairs at the University of Wisconsin-Madison. Financial support for this research was provided in part by a grant to the Institute for Research on Poverty from the Department of Health and Human Services, and by a grant of computer time from the Research Foundation of the City University of New York. The authors would like to thank Katherine Bradbury, Sheldon Danziger, Douglas Holtz-Eakin, Daniel Weinberg, and several anonymous referees for helpful comments on previous drafts.
© 2002 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X