Elasticity of US Federal Income Tax Liabilities

Calculations from the NBER TAXSIM model.

Fixed 1984 Income Distribution

1960 1.558
1961 1.550
1962 1.535
1963 1.528
1964 1.566
1965 1.450
1966 1.427
1967 1.414
1968 1.398
1969 1.389
1970 1.391
1971 1.451
1972 1.478
1973 1.453
1974 1.444
1975 1.580
1976 1.572
1977 1.537
1978 1.504
1979 2.220
1980 2.212
1981 2.118
1982 2.103
1983 2.093
1984 2.107
1985 2.097
1986 2.104
1987 1.672
1988 1.613
1989 1.601
1990 1.600
1991 1.618
1992 1.627
1993 1.633
1994 1.666
1995 1.672
1996 1.671
1997 1.677
1998 1.705
1999 1.690
2000 1.661
2001 1.740
2002 1.740
2003 1.752
2004 1.750
2005 1.740
2006 1.740
2007 1.736
2008 1.760
2009 1.980
2010 1.942
2011 1.792
2012 1.788
2013 1.801
2014 1.771
2015 1.765

The elasticity shown is the percentage change in federal income tax liability (including EITC and minimum taxes, but not payroll taxes) for a one percent change in all income and deduction items.

Tax law for 2010+ includes 2011 extensions.

The calculation is based on 1984 income and deduction levels, in(de)flated to each year, without regard to the actual distribution of income each year.

For 1987 on, the increase in income is assumed to be real. For earlier years, it does not matter.

Daniel Feenberg
23 August 2016