I am computing pre-tax personal income and I have realised that your variable, inctot, is computed without including the stimulus variable, existent for 2009. Could you please explain me why this is the case? Shouldn’t we consider it as a government transfer?
Thank you
You are correct that the 2009 STIMULUS variable is not included in pre-tax income (INCTOT). Since it was a tax rebate, the Census Bureau considered the stimulus payment as part of post-tax income (see “2008 Income” section here). In other words, it is treated similarly to other tax credits (i.e. EITC, Child Tax Credit, Making Work Pay credit, etc.) and considered unique from pre-tax public assistance (welfare) income such as AFDC.
Hope this helps.
Ok, thank you very much.