A couple of weeks ago, I discussed the low level of federal taxes as a share of the GDP in the United States, both historically and in comparison with other developed economies. I noted that total federal revenue — income, corporate and payroll taxes combined –– has been below 15% of GDP for three years in a row, its lowest level since 1950 and well below the postwar average of about 18.5% of GDP. ...
A common criticism of my earlier point about federal taxes as a share of G.D.P. is that I ignored marginal tax rates — the tax on each additional dollar earned. ... The Tax Policy Center annually calculates average and marginal tax rates for four-person families with the same relative income. It starts with the median income. ... It then calculates tax rates for those with half the median income, a common definition for the working poor, and twice the median income, which would represent the reasonably well-to-do. The table below shows the average and marginal tax rates for each of these families since 1955, including both federal income taxes and the employee share of payroll taxes.
[I]t is clear that federal taxes have not been rising and are, at least in historical terms, lower for most taxpayers than they have been since the 1960s. Those who assert that taxes are rising or are at confiscatory levels simply do not know what they are talking about.
» Tax cuts don't pay for themselves from Don't Mess With Taxes
Here's a fun way to wrap up a Monday, getting everyone fighting about, finessing figures, debating discussing tax cuts. Visit msnbc.com for breaking news, world news, and news about the economy Play nice. See you tomorrow! Hat tip: TaxProf Blog Related... [Read More]
Tracked on Jun 21, 2011 3:13:27 PM
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