A Cross-Sectional Model of Built-in Flexibility, 1954-1969

This paper develops and applies a crosssection tax junction which mirrors both the constancy and the progressivity oj the federal structure from 1954 to 1963, and from 1965 to 1969. The model also appraises the impact of the 1964-65 tax cut and longerterm trends of individual tax-avoidance behavior. The combined effects of higher money incomes, the 1964-65 legislated increase in progressivity, and the reduced use of tax leniencies, have raised the built-in flexibility of the federal personal income tax structure. In 1954, a $ 100 change in income yielded approximately $16.40 in taxes. By 1969, a $100 change in income yielded approximately $19 in taxes.