U.S. Private Saving and the Tax Treatment of IRA/401(k)s: A Re-examination Using Household Survey Data

August 1, 1996

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Alun H. Thomas, and Christopher M Towe. U.S. Private Saving and the Tax Treatment of IRA/401(k)s: A Re-examination Using Household Survey Data, (USA: International Monetary Fund, 1996) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The effect of the tax treatment of IRA/401(k)s on U.S. personal saving is examined using household survey data from the Survey of Consumer Finances. The results suggest that the tax treatment of IRA/401(k)s encouraged households to increase the share of assets held in the form of pension savings, at the expense of saving in the form of housing equity. Some evidence also was found to suggest that the tax treatment of pension savings similarly affected the flow of saving. In particular, the data appeared to reject the hypothesis that the tax treatment of IRA/401(k)s increased total personal saving.

Subject: Aging, Financial institutions, Income, Labor, Marginal effective tax rate, National accounts, Pensions, Population and demographics, Stocks, Tax policy

Keywords: Aging, Asset share, Assets--financial assets, Income, Marginal effective tax rate, Pensions, Saving rate, Stocks, Threshold dummy, Wealth household, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1996/087
Stock No:

WPIEA0871996
ISBN:

9781451850970
ISSN:

1018-5941

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