Federal Taxes: 1958 and 2019

Chris EdwardsWe often hear that politicians have slashed tax rates on the rich repeatedly at the expense of other groups since Ronald Reagan was in office. AWashington Post reportnoted, “Many economists say decades of cuts to income tax rates on the highest earners are one of the drivers of the runaway inequality that’s come to characterize the modern U.S. economy.”A newopinion column at Bloomberg claims, “In the past four decades, Congress after Congress has cut taxes on the richest people and corporations . . . In the four decades since ERTA [1981] was signed, Republicans — with some assists from Democrats — have worked to dismantle a system where the wealthiest people pay substantially highe r rates.”These narratives are off-base. Top-earning households have paid consistently high overall federal tax rates for decades, and middle- and lower-income households have received the largest relative tax cuts since the 1980s.The Congressional Budget Officehas released new estimates of income and taxes for 2019. The chart on page 18 shows total federal taxes as a percent of income. Federal taxes include individual income, corporate income, payroll, and excise. The average tax rate on the top 1 percent has hovered above 25 percent since 1979. The average rate on middle-income households has fallen to 14 percent, and the average rate on the bottom one-fifth of households has plunged to near zero. The largest tax cuts have been at the bottom.Let ’s go back further. Thi...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs