March 22, 2007

Estimating Federal Tax Burdens for Major City Areas, Counties, and U.S. Congressional Districts

Download Working Paper No. 2

Working Paper No. 2

The burden of federal taxes does not fall equally on the cities, counties and congressional districts that comprise the geographic landscape of the United States. Because tax collections figures provide little information about the true economic burden of taxes, researchers must employ various statistical methods to estimate the economic incidence of federal taxes across geographic areas. We outline a detailed methodology for modeling the burden of each federal tax—individual income, corporate income, payroll, estate and gift, and all excises—by narrow geographic areas. Using this model, we provide estimates of federal tax burdens by three geographic areas for Calendar Year 2004: major city area, county and U.S. congressional district.

(See also Tax Foundation Special Report No. 150, “Putting Taxes on the Map: Federal Tax Burdens by City, County, Congressional District and State.”)

A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.