Tax Return Distribution for North Dakota, 2015

The state of debate in the country regarding taxes being what it is I thought I would make a few posts on the topic over the next few days. There are many issues with the legislation being discussed (intentionally not using the word debated right now). The issues and implications for North Dakota will need to wait for another post, but it will be forthcoming.

I thought for today’s purposes I would just look at the distribution of Adjusted Gross Income (AGI) across the state. It is actually a bit interesting and instructive to see this pseudo-income distribution. Most of the discussion coming out of the Joint Committee on Taxation (JCT) and others states the impacts based on AGI.

One of the interesting issues out there right now is the definition of middle class. Is this the middle 60% of the income distribution? Is it defined by a dollar amount? Clearly there are contextual factors that matter as well, for example family size. The adjusted gross income amount coincides well with the reported median income measures from the Census Bureau.

I will post some of the changes in the distribution over time in the coming days. This is basically the foundational piece of meaningful, data-driven discussions about the impacts of tax changes. This is how changes will be distributed and is a key element of evaluating the overall impacts.

Clearly we are no longer talking about tax reform and just tax cuts. That is unfortunate and disappointing, but not surprising given the desire to enact policy through reconciliation. When in the realm of discussing cuts we need to start thinking about distributions, gains, and losses.


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