Household Incomes in Tax Data: Using Addresses to Move from Tax Units to Households Jeff Larrimore † , Jacob Mortenson ∗ , and David Splinter ∗ † U.S. Federal Reserve Board ∗ Joint Committee on Taxation, U.S. Congress May 2017 Disclaimer: This research embodies work undertaken for the staff of the Joint Committee on Taxation, but as members of both parties and both houses of Congress comprise the Joint Committee on Taxation, this work should not be construed to represent the position of any member of the Committee. The views expressed in this presentation are not necessarily those of the U.S. Federal Reserve Board.
Sharing Unit Selection Matters
Constructing Households from Tax Records Tax records used: ◮ Population of Form 1040 ◮ Population of information returns Steps, roughly: ◮ Clean addresses ◮ Aggregate by address, drop households with 11+ members ◮ Income: pre-tax, post-transfer cash income, no cap. gains Results: ◮ 117.5 million March CPS households in 2010 ◮ 117.4 million tax-based households in 2010
Tax Data Household Income Distribution
Tax Data Household Income Distribution
CPS and Tax Unit Age Distribution
CPS, Tax Unit, and Tax Unit + Non-filer Age Distribution
Percent of Households with Multiple Tax Units
Percentage Receiving the EITC
Percentage Receiving the EITC
Percent of EITC Benefits
Percent of EITC Benefits
Average Amount of EITC Benefits
Average Amount of EITC Benefits
Percentage Receiving the ACTC
Percentage Receiving the ACTC
Percent of ACTC Benefits
Percent of ACTC Benefits
Average Amount of ACTC Benefits
Average Amount of ACTC Benefits
Next Steps ◮ Improve Household Creation: Fuzzy Matching ◮ Estimate Household Tax Progressivity ◮ Other Applications for Household Data
Household Size Distribution Household Size Decennial Census March CPS Tax Households 1 31,205 31,399 37,323 2 38,243 39,487 32,695 3 18,758 18,638 18,072 4 15,625 16,122 15,521 5 7,538 7,367 7,507 6 3,075 2,784 3,601 7 or more 2,272 1,739 2,660 Total 116,716 117,538 117,379
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