This paper assesses the effects of U.S. tax policy reforms on inequality over around three decades, from 1979 to 2007. It applies a new method for decomposing changes in government redistribution into (1) a direct policy effect resulting from policy changes and (2) the effects of changing market incomes. Over the period as a whole, the tax policy changes increased income inequality by pushing up the income share of high-income earners (the top 20%).
Bargain, O., Dolls, M., Immervoll, H., Neumann, D., Peichl, A., Pestel, N., & Siegloch, S. (2015). Tax policy and income inequality in the United States, 1979–2007. Economic Inquiry, 53(2), 1061-1085. https://doi.org/10.1111/ecin.12172 (Original work published 2015)