This bulletin presents and evaluates a particular method of estimating the yields and incidence of various possible types of income tax. The method is one of dividing the population into income brackets and estimating the number of people and average tax in each bracket. The basic data are the income distributions of families and single individuals in 1935-36 published in "Consumer Incomes in the United States" by the National Resources Committee and the Internal Revenue Bureau's "Statistics of Income" for various years.

It is necessary to combine data from these two sources since "Statistics of Income" presents information for higher income brackets only while the National Resources Committee's definition of income does not exactly correspond to the income on which a person is taxed. To make estimates using National Resources Committee data it is necessary to adjust the data for (1) the increase in population since the data were compiled, (2) the increase in national income, (3) the tendency of some persons to understate their incomes in filing tax returns, (4) the inclusion of home-grown food and occupancy of owned houses in NRC estimates, and (5) deductions and exemptions to which the taxpapers are entitled.