The Lifecycle of the 47 Percent

Nirupama S. Rao (with Don Fullerton)
- Revise & Resubmit, National Tax Journal

We assess the concentration and duration of zero tax liabilities and of transfers, using data from the Panel Survey of Income Dynamics. We find that neither is strongly concentrated. In at least one year, 68% owe no federal tax, 78% receive transfers, and 58% receive transfers other than Social Security. Of those not owing federal tax in any given year, 18% pay tax the following year, and 39% contribute within five years. Of those who receive transfers other than Social Security within a given year, nearly 44% stop receiving such transfers the next year, and more than 90% stop within ten years.

Wagner Faculty