Wednesday, April 15, 2009

Your Federal tax burden eased

Although people complain much about taxes, the fact is that, for taxpayers in most income groups, the share of their income going to Uncle Sam is close to their lowest levels in decades.

That may not be very comforting for people who filed their IRS returns this spring, but facts are facts, and the Center on Budget and Policy Priorities laid them out blandly in a report on April 14.

Take a median-income family of four. It paid only 5.9 percent of its income in federal income tax in 2007, slightly higher than the 2003 all-time low of 5.3 percent. In fact, that family’s tax rate was lower in 2007 than in any year between 1956 and 2002.

Of course, the highest-income households fared better, and those at the top of the pyramid are faring much better. For example, in 2010, when the 2001-2008 tax cuts are fully in effect, households with annual incomes of more than $1,000,000 a year will receive tax reductions averaging $168,000, whereas households in the middle fifth of the income distribution will average $1,150.

The Center on Budget and Policy Priorities is an equal opportunity collector and interpreter of vital national statistics. This report draws on, analyzes, and updates data from the Treasury Department, the Congressional Budget Office, the Brookings Institution, the Tax Policy Center, and other sources, including groundbreaking work on income inequality by two economists, Thomas Piketty and Emmanuel Saez.

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