Office of Tax Analysis: Treasury’s Distribution Methodology and Results

Treasury’s Distribution Methodology and Results July 2021

One of the principal tasks undertaken by the Treasury Department’s Office of Tax Analysis (OTA) is the analysis of the distribution of tax burdens. OTA’s distributional analyses show how federal taxes and proposed changes in tax law affect the distribution of after-tax income across families. Distributional analyses provide policy makers with guidance on the fairness of the current or proposed federal tax burden. Distributional analyses do not address economic
efficiency, simplicity, or other important aspects of good tax policy.1

Distribution Methodology
Distributional analysis has several components, of which the major components are:

Taxes Included: All federal taxes are included in Treasury’s analyses: individual and corporate income taxes, payroll taxes (Social Security tax, Medicare tax, and unemployment tax), excises
and customs duties, and estate and gift taxes. Treasury analyses do not include state or local taxes.

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