| While research on tax incidence has made substantial gains in recent years, very little progress has been made in modeling tax burdens across lifetime income categories. This dissertation presents measures of tax burdens for individuals in twelve different lifetime income categories in the U.S. population.; Incidence is determined within a computable general equilibrium model, featuring life cycle optimization on the part of consumers and a highly disaggregated production side. Because the model is utility-based, not simply income-based, the computed welfare changes account for the income effects of price changes as well as excess burdens. The analysis also incorporates a large amount of real-world data and econometrically estimated parameters. In particular, lifetime incomes are determined using the Panel Study of Income Dynamics, and consumption patterns are estimated from the Consumer Expenditure Survey. We find that there are significant differences in the shapes of age-income profiles and the bundles of consumption goods across the lifetime income categories. These differences contribute to the interesting incidence results found in the lifetime context.; In order to determine the distribution of U.S. tax burdens across lifetime income categories, we simulate the replacement of each type of tax with a proportional tax on lifetime labor endowments, and we then examine the pattern of lifetime equivalent variations. We find that personal income taxes are lifetime progressive, but sales and excise taxes, payroll taxes, and corporate income taxes tend to be lifetime regressive. Property taxes are neither progressive nor regressive. Overall, the entire U.S. tax system appears close to proportional in lifetime incidence, although relatively higher burdens are borne by the very poorest and the very richest. While this overall pattern of tax burdens appears similar to that found under some annual studies, the underlying factors explaining this lifetime incidence are significantly different from those under the annual perspective. |
