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consider where to locate operations to mostly constant over the past decades.
The findings are a best attract talent and employees. They conclude that with payroll taxes
included in the ETR analysis, there
good reminder that ‘Six Decades of US Tax is a higher overall tax burden for the
employees bear Reform: Why Has the middle-class demographic studied.
Average Couple’s Tax Burden
The findings are a good reminder
federal taxes beyond Increased?’ that employees bear federal taxes be-
what is reported on The IRS and many other federal and yond what is reported on their Form
state offices and agencies collect a lot of 1040, U.S. Individual Income Tax
their Form 1040, U.S. data, typically reported as raw data, such Return, and how a distorted picture
Individual Income Tax as how many returns are filed by indi- results for taxpayers and policymakers
Return. viduals within various income ranges. when the somewhat hidden payroll
taxes are omitted from reports on tax
What is not always seen is a lot of
analysis of this data in ways that provide incidence and ETRs. The article also
be attracted to lower state income and insights into historical trends and pos- includes interesting lists of the major
property tax burdens. sible improvements to the laws to which individual tax changes enacted during
The authors examine the tax-effect the data relates. each presidency from that of Dwight
question by hypothesizing that there In a 2021 article published in the Eisenhower to Donald Trump’s.
will be a greater decrease in popula- Accounting Historians Journal (Vol. 48,
tion in states that have a higher overall No. 2), James M. Plečnik and Shan Practice relevance
burden of death/gift, sales, and property Wang report on their findings from The five articles summarized here
taxes. They test their hypotheses by research and tax calculations performed are a small portion of the tax research
using regression models that separately for 1955 through 2018. The research- produced by tax faculty annually. When
compare the net migration at the state ers reviewed the tax laws applicable practitioners visit campuses or other-
level against each of the tax burdens. to a hypothetical median-income wise interact with faculty, we encourage
They find that states with higher taxes married couple with no dependents them to ask faculty about their research.
tend to be associated with greater and income beyond eligibility for the Academics will benefit from additional
out-migration. They also find, when earned income tax credit. This research insights into how that research relates
combining all the tax burdens into one involved finding the standard deduc- to practice, and we believe practitioners
model, that property and some types tion, personal exemption, married- will gain insights that can help in their
of sales (selective sales) taxes are the filing-jointly tax rate structure, and any planning and advocacy work. ■
most significant. When examining special temporary relief provided to
the economic impact on migration individuals, all for over 60 years. They
from these two taxes, they find that a also researched payroll tax information Contributors
one-standard-deviation increase in net for the years under review. U.S. Census
migration is associated with a $12.99 Bureau data was used to determine the David Hulse, Ph.D., is an emeritus pro-
and $126.73 per capita decrease in median income for the couple, which fessor at the University of Kentucky in
selective and property taxes, respec- ranged from $4,421 in 1955 to $80,663 Lexington, Ky.; Kerry Inger, CPA, Ph.D.,
tively, collected. in 2018. is an associate professor at Auburn Uni-
State and local policymakers would With this income and payroll tax versity in Auburn, Ala.; Annette Nellen,
find this paper of interest as they consid- information (for both employee and Esq., CPA, CGMA, is a professor in the
er the degree and type of taxation levied employer, after tax), the researchers Department of Accounting and Finance
on residents. It is important to have the measured for all years the effective at San José State University in San José,
revenues to fund services and projects income tax rate (EITR) and the effec- Calif., and is a past chair of the AICPA
but at the same time recognize that an tive tax rate (ETR). The ETR includes Tax Executive Committee; and Mitchell
increase in taxes is associated with a both income and payroll taxes borne Oler, CPA, Ph.D., is a department chair
decrease in overall tax participants. This by the median-income couple. The and associate professor at the University
paper provides some quantitative analy- authors found that the EITRs have of Wyoming in Laramie, Wyo. For more
sis that can help determine the right mix decreased but ETRs have increased. information about this column, contact
of taxes and services. Further, businesses They also observe that federal tax col- thetaxadviser@aicpa.org.
can use this information when they lections relative to GDP have been

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