Your taxes are really low, in one chart

Taxed enough already? Hardly. According to the Congressional Budget Office, your effective federal tax rates are near historic lows.

One of the great ironies of the rise of the tea party movement was that it coincided with the lowest total tax burdens seen in at least 30 years. The chart below plots effective federal tax rates since 1979 by income group. The key word here is "effective" -- these are the tax rates people actually pay after factoring in things like the mortgage interest deduction, the child tax credit and the myriad other deductions and credits written into the U.S. tax code. Values for 2011 and 2012 aren't yet available, but the CBO does provide projections for 2013 tax filings, which I've plotted, as well.

effective tax rates

Overall the trend is downward. The average filer saw her effective tax rate drop from 22 percent in 1979 to 18.1 percent in 2010. Rates on the bottom 20 percent of tax filers went from 7.5 percent to 1.5 percent, while the top 20 percent of earners saw a more modest decrease, from 27.1 to 24.0 percent over the same period.

The effect of crisis-era policy is clearly visible in the sharp drop in rates from 2007 to 2008, mostly from tax provisions in the American Recovery and Reinvestment Act of 2009. Tax rates hit rock bottom in 2009, right as the tea party movement was gaining steam.

The tea party movement has lost some momentum since then, but many Republicans have not lost any of their tax-cutting fervor. Rep. Paul Ryan's budget, passed Thursday in the House, contains $5 trillion in tax cuts, including simplifying the tax bracket structure from seven tiers to two -- a 10 percent bracket and 25 percent bracket.

The Ryan budget has zero chance of passing the Senate. And, in fact, tax rates are likely to go up in the coming years, as many of the crisis-era ARRA tax cuts expire. But even with the increases taking effect this year, as charted in the CBO projections above, rates are still near historic lows for all but the top 1 percent of wage earners.

 

Christopher Ingraham writes about politics, drug policy and all things data. He previously worked at the Brookings Institution and the Pew Research Center.
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