Analyze the distributional effects of different fiscal policies. Examine how tax burdens and spending benefits are distributed across the income spectrum — from quintile analysis to understanding who really bears the economic burden of corporate taxes.
What you will learn
Read and interpret distributional tables (TPC/JCT-style)
Distinguish statutory from economic incidence
Apply labor vs. capital incidence assumptions to corporate taxation
Identify regressive vs. progressive policies from distributional data
0 of 2 exercises complete at the undergraduate level. Saved in this browser.
1. Reading a Distributional Table
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The distribution tab shows the average tax change per household by income quintile and the share of total tax change going to each group.
Run a 2pp income tax increase on income above $400,000. Then answer: what share of the total tax increase is borne by the top 1% vs. the bottom 60% combined?
Enter your estimate of the top-quintile (top 20%) share of the tax change.
2. Corporate Tax Incidence: Workers vs. Capital Owners
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The corporate income tax is paid by corporations, but who bears the economic burden? There are two major views:
A) Traditional view: shareholders (capital owners) bear the burden
→ tax falls on top income quintile
B) Open-economy view: capital is mobile internationally, so workers
bear the burden through lower wages → tax is more broadly spread
CBO and JCT split the burden 75% capital / 25% labor.
Consider a 7pp corporate rate increase (21% → 28%). The model scores this at approximately −$1.35T over 10 years.
Given the 75/25 split, estimate: if annual corporate tax revenue increases by $135B, how much falls on (a) capital income earners and (b) workers?
Submission
Undergraduate · 0 of 2 complete
Name not given · Tax Incidence: Who Bears the Burden?
1. Reading a Distributional Table Not attempted
2. Corporate Tax Incidence: Workers vs. Capital Owners Not attempted
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