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Federal Taxes, Says CBO Data Enter your e-mail address signup
Monday, June 21, 2010
By Terence P. Jeffrey, Editor-in-Chief
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(CNSNews.com) - Middle-class Americans--not the rich or the poor--pay
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the majority of annual tax revenues taken in by the federal government,
according to data released in a new Congressional Budget Office study.
                click above!
Households earning less than $34,300 per year, meanwhile, actually pay
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a negative average federal income tax rate.
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Middle-class households that earned between $34,300 and  $141,900 
paid 50.5 percent of all federal tax revenues in 2007 (the most recent year
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analyzed), according to the CBO study released Thursday, and
households that earned between $34,300 and $352,900 paid 66.7   
percent of all federal taxes.
 
Households in the top 1 percent for annual income (those earning more
than $352,900) paid a healthy 28.1 percent of all federal taxes, but
households in the lower income brackets paid relatively little. Those 
earning less than $34,300 paid only 5.2 percent of all federal taxes, and
those earning less than $20,500 carried almost none of the federal tax
burden (just 0.8 percent of the total) in 2007.
 
The average overall federal tax rate (including income, Social Security,
Medicare, excise and other taxes) for all American households was 20.4
percent in 2007. But the average rate rose dramatically as household
income rose. Households earning less than $34,300 paid an average
overall federal tax rate of 10.6 percent, while households earning more
than $74,700 paid an average overall federal tax rate of almost two and Related Articles
half times that much--25.1 percent.
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When it comes to the federal income tax alone (as opposed  to Social  Movie Makers

Security, Medicare, excise and other taxes) the lower income brackets CBO Says Govt to Collect $69 Billion in Tax
Penalties From Health Care Law’s Insurance
actually paid a negative rate, thanks to programs such as the Earned
Mandate in First 10 Years
Income Tax Credit that paid people a “credit” for income taxes they never
A Message from Congress: No One Questions
paid. The average federal income tax rate for households earning less
Our Authority
than $34,300, according to the CBO, was -0.4 percent in 2007, and the
McCain Says He Supports Cutting Federal
average federal income tax rate for households earning less than $20,500 Spending Enough to Counter the $6 Trillion in
was -6.8 percent. New Debt CBO Predicts over Next Ten Years
  Congressional Budget Office Sees 2010 Budget
Over the past three decades, according to the CBO data, taxation has Deficit of $1.35 Trillion

been getting more progressive, as the tax burden has lightened on lower
income households while increasing on higher income households. During
those three decades, Presidents Ronald Reagan and George W. Bush
signed laws cutting the top marginal income tax rates, but Presidents
George H.W. Bush and Bill Clinton signed laws increasing the rates.
The CBO divided the 116.9 million American households of 2007 into five
roughly equal parts (quintiles) graded by income. The income range for
the lowest quintile was $0 to $20,500; the second quintile, $20,500 to
$34,300; the third quintile, $34,300 to $50,000; the fourth quintile,
$50,000 to $74,700; and the fifth quintile, $74,700 and above. The share
of overall federal taxes paid by each of the first four quintiles decreased
from 1979 to 2007, while the share of overall federal taxes paid by the
Senate Health Care Bill Would Force Some
Middle Class Families to Pay $15,200 Yearly
Insurance Fee, According to CBO Analysis
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Year for Obamacare, But 24 Million People Will
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Taxes on People Making as Little as $104,425
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Fiscal Year, Congressional Budget Office Finds
highest-income quintile increased, meaning the overall tax burden was Related Videos
shifting away from that class of Americans making less than $74,700 per Bachmann: Obama's
year in 2007 toward those earning more. Redistributing Wealth Through
  Health Plan

TAX BURDEN HAS GROWN LIGHTER ON LOWER INCOME

Pelosi: Obama’s Budget a
HOUSEHOLDS, HEAVIER ON HIGHER
‘Blueprint for Economic
  Stabilization’ for America, Will
Share of total federal tax burden paid by each income quintile, 1979-2007 ‘Reduce the Deficit’

(Income ranges: 1st Quintile:$0 to $20,500; 2nd Quintile, $20,500 to Rep. King: ‘I’m For Abolishing
$34,300; 3rd Quintile, $34,300 to $50,000; 4th Quintile, $50,000 to the IRS and the Federal Income
Tax Code’
$74,700; 5th Quintile, $74,700 and above.)

                         Income Quintiles
 
Year       1st          2nd        3rd         4th         5th 
 
1979       2.1          7.2          13.2        21.0        56.4
1980       2.0          7.0          13.3        21.3        56.3
1981       2.0          7.1          13.6        21.9        55.2 
1982       2.1          7.1          13.6        22.1        55.0 
1983       2.2          6.9          13.3        21.8        55.7
1984       2.4          7.2          13.2        21.4        55.6
1985       2.3          7.2          13.2        21.3        55.8
1986       2.1          6.8          12.7        20.8        57.5
1987       1.8          6.5          12.4        20.7        58.4
1988       1.7          6.4          12.2        20.4        59.1
1989       1.6          6.4          12.6        20.6        58.7
1990       1.9          6.8          12.6        20.7        57.9
1991       1.9          6.6          12.6        20.9        57.9
1992       1.7          6.2          12.2        20.2        59.5
1993       1.6          6.0          11.8        19.8        60.5
1994       1.3          5.8          11.8        19.8        61.1
1995       1.3          5.8          11.4        19.3        61.9
1996       1.1          5.5          11.1        18.8        63.4
1997       1.1          5.4          10.8        18.3        64.2
1998       1.1          5.2          10.5        18.2        64.9
1999       1.1          5.2          10.2        17.8        65.6
2000       1.1          4.8          9.8          17.5        66.6
2001       1.0          4.9          10.1        18.4        65.3
2002       1.0          4.9          10.4        18.8        64.8
2003       1.0          4.5          10.0        18.4        65.8
2004       0.9          4.4          9.7          17.6        67.2
2005       0.8          4.2          9.2          16.8        68.8
2006       0.8          4.1          9.0          16.5        69.3
2007       0.8          4.4          9.2          16.5        68.9
 
 

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Comments

Robert.T (39 seconds ago)     

I guess one could consider the middle of a loaf of bread to be everything except
the heels. Maybe Terence considers the middle class to be everyone in
between Bill Gates and Obama's Aunt Zeituni... Still, what is the point? Is it
that the government not stealing enough from the rich? Are the (enlarged)
middle class supposed to be angry now and demand the government take
more from the rich? I grew up poor, but we were taught that stealing was a
sin... even if you have the government do the stealing for you.
 Dion (5 minutes ago)     
One thing I noticed is that this does not speak to the issue of sales tax, which
always hits the poor hardest since they spend almost all their income on
taxable items.

mamajug9 (8 minutes ago)     

USSANEWS.com - the RIGHT news.

cowenwv (10 minutes ago)     

I am in the top 20%, but I am in no way rich. My wife and I drive a 9 year old
mini-van, I have a full time job, plus serve in the military reserves, and my wife
also works. There is a big spread in that top 20%. Something I do notice is
that it is the folks in the bottom 95% of this scale who make America work. It
is the blue collar and working class who protect our country in the military, who
serve as nurses and doctors and who teach our children. The wealthy, tend not
to serve in the military and they only use their wealth to buy privilege and get
richer off of the hard work of other Americans. If it wasn't for the military, the
rich would have nothing and foreign invaders would take it all away. It is
American soldiers and Marines who pay for this country's freedom with blood,
so it is only fair that the ultra-rich have to pay with significant taxes on their
wealth.

stk33 (53 minutes ago)     

The author of thsi story is math challenged, and seems to have trouble
interpreting the simple data. The middle quintile, those earning $34K to $50K,
paid just 9.2% of the federal burden. Since the median salary in the US is
within this band, this is really the middle class. Those earning $50 to $75K
paid 16.5% of the federal burden. The upper 20%--not the middle class, are
those made in in excess of $75K. They paid 68%. In what universe is the upper
20% of anything "middle class"? The bottom 80% of earners paid about 30% of
taxes.

esalkin (1 hour ago)     

And I would add "politics" as a fourth degree of untruth.

esalkin (1 hour ago)     

As Mark Twain noted; "There are three kinds of lies: lies, damned lies, and
statistics."

esalkin (1 hour ago)     

wufooye5, I have to agree with you on this one. It should report 75-150, 150-
1M, 1M-10M, 10M-100M and 100M+.

wufooyee5 (6 hours ago)     

Interesting. The 5th quitile should have ben expanded to show the higher
income families to show what they paid.

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