The Tax Benefit of Income Smoothing

A worker can contribute pre-tax dollars to a private pension plan. Under a progressive tax, this feature reduces income taxes. Ippolito (1986} argues that an individual in 1979 can reduce lifetime taxes by 20%. We re-examine his analysis using the complete time-series of US income tax history and find that the tax benefit of income smoothing is much smaller.

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Year of publication:	2011-06
Authors:	Rydqvist, Kristian ; Schwartz, Steven ; Spizman, Joshua
Institutions:	C.E.P.R. Discussion Papers
Subject:	income tax history \| private pensions \| tax progressivity

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 8425
Classification:	D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; G11 - Portfolio Choice ; G18 - Government Policy and Regulation ; G23 - Pension Funds; Other Private Financial Institutions ; H24 - Personal Income and Other Nonbusiness Taxes and Subsidies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009644030