TY  - JOUR
AU  - Fullerton,Don
AU  - Rogers,Diane Lim
TI  - Lifetime vs. Annual Perspectives on Tax Incidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3750
PY  - 1992
Y2  - January 1992
UR  - http://www.nber.org/papers/w3750
L1  - http://www.nber.org/papers/w3750.pdf
N1  - Author contact info:
Don Fullerton
Department of Finance
University of Illinois
BIF Box#30 (MC520)
515 East Gregory Drive
Champaign, IL  61820
Tel: 217/244-3621
Fax: 217/244-3102
E-Mail: dfullert@illinois.edu

Diane Rogers
E-Mail: Diane_Rogers@jec1.senate.gov
AB  - Recent academic research on tax incidence has shifted from an emphasis on static and annual perspectives to examinations of dynamic and lifetime issues. Meanwhile, policy economists are forced to rely on annual data and hence annual analyses. The purpose of this paper is to discuss the nature and analysis of lifetime tax incidence, and to compare and contrast this lifetime perspective with the more familiar annual perspective. In our comparison, we find that (1) the lifetime perspective requires much more data over longer periods of time, because results depends critically on the whole shape of the lifetime earnings profile, (2) individuals classified by annual income decile are often reclassified into very different lifetime income deciles, (3) the personal income tax and corporate income tax appear less progressive on a lifetime basis, while consumption taxes appear less regressive on a lifetime basis, and (4) despite the different approaches and the different reasons underlying the incidence of each particular tax, the lifetime incidence of the entire U.S. tax system is strikingly similar to the annual incidence.
ER  -