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Chart showing change in tax rates by income 1980-2010
Total tax rates—federal income + payroll + corporate + state/local—have gone down for
everyone over the past 30 years, but the top earners have benefited most.
Derek Thompson at The Atlantic has pointed us to The New York Times's series of charts on what's been happening with taxes in the United States over the past 30 years. It's pretty much what you probably suspected:
Taxes fell 5% for the poorest households. They fell about 7% for the typical household. And they fell 14% for the richest households. It is fair to say that between President Carter and President Obama, taxes have fallen by twice as much for the richest families as for the median family.
Payroll taxes have gone up for all, but not as much for the rich because of the earning cap Social Security, now at $110,100.

State and local taxes have risen and these have affected lower-income people the most. That's because state and local governments levy the same property and sales tax rates on everyone, which hits those with lower incomes hardest. (Renters pay property taxes through their rent.) Less affluent households pay a larger share of income in sales taxes than those that are more well-to-do.

Progressivity has been reduced considerably.

Households earning more than $350,000 paid 20 percent of the nation’s taxes in 2010, 1.37 times their share of total income, while in 1980, those households paid taxes equaling 1.56 times their share of income. The change was larger before the recession, which reduced investment income, as in past recessions.
Republicans, including Rep. Paul Ryan, continue to argue that what the tax system needs now is a further lowering of income-tax rates, both corporate and individual, with the biggest benefits going to the folks who already have the fattest wallets. They naturally hate proposals like the so-called Buffett Rule that would set a minimum level for people with incomes of $1 million and above—Buffett recently said he'd like to see a minimal effective tax rate of 30 percent on anybody making $1 million and 35 percent on anybody making more than $10 million.

That, as I have argued, is a step in the right direction, but not enough.

Originally posted to Meteor Blades on Mon Dec 03, 2012 at 01:24 PM PST.

Also republished by Income Inequality Kos and Daily Kos.

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Comment Preferences

  •  Quite right about progressivity, but that's not (11+ / 0-)

    the whole story. Productivity has also increased sharply in the last decade, but workers have not shared in this increase.

  •  I've seen commenters in a few diaries arguing (7+ / 0-)

    that ALL the Bush tax cuts need to be ended, for both the wealthy and the middle class.  We need to go back to the tax rates of the Clinton years or earlier, so we have the resources to deal with pressing problems.

    The problem is that the incomes of the top 2 percent have gone up dramatically since the 70s, but the incomes of working class and middle class people have flatlined. And cost of living keeps going up. We need to keep the Bush tax cuts for them just to stay anywhere close to even.

    If we can get the economy moving again, though, I expect we need to move back toward the 80s levels of taxation for the middle class.

    --------------------- “These are troubling times. Corporation are treated like people. People are treated like things. …And if we ever needed to vote, we sure do need to vote now.” -- Rev. Dr. William J. Barber

    by Fiona West on Mon Dec 03, 2012 at 04:50:59 PM PST

    •  Yes. Yes. Exactly. (3+ / 0-)
      Recommended by:
      divineorder, War on Error, DSPS owl

      To reiterate a comment I just made regarding tax hikes across the board:

      Our economy happens to be deathly ill right now. It's not even breathing on its own, like it was in 2003. Thus, taking any dollars away from the decimated consumer class is pretty much the kiss of death. That is what the IMF and G20 announced less than a month ago about our tax hikes (coupled with the sequestered cuts). But then, they have economists who were not educated in the United States -- so they have an advantage over us in predicting economic outcomes.
      But, yes. When we can, we must return to the tax structure that created America's middle class and its 70-percent consumer-spending engine.

      I don't know if that is sustainable, but on the way back to normalcy -- we'll find the sweet spot of economic justice. Right now, we are moving far, far away in the wrong direction.


      A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

      by Pluto on Mon Dec 03, 2012 at 07:11:48 PM PST

      [ Parent ]

      •  All in the Trickle Up Poverty Plan, right? (1+ / 0-)
        Recommended by:
        Pluto

        It's difficult to be happy knowing so many suffer. We must unite.

        by War on Error on Mon Dec 03, 2012 at 07:32:24 PM PST

        [ Parent ]

      •  IMF Economists are Clueless (0+ / 0-)

        Its forecast for 2013 Greek GDP will have been off by at least 22%.

        22% !!!!!!!!!!!!!!!!!!!!!!!!!

        http://ftalphaville.ft.com/...

        The IMF forecast for 2013 nominal GDP has been reduced by an astonishing 22% in the two years since Nov 2010. In our opinion it is this unanticipated decline in economic activity that has surprised the Fund, and driven a stake through the heart of the programme. We would be interested to hear if someone else knows of a bigger or more significant 2-year forecasting revision for an industrialised economy.

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

        by PatriciaVa on Mon Dec 03, 2012 at 08:01:02 PM PST

        [ Parent ]

        •  Are you not Miss "Greece is going to be kicked out (0+ / 0-)

          ...of the EU and the Euro is going to fail"? Over a year ago?

          Greece is going nowhere and neither is the EU.

          As I've told you repeatedly.

          You.Are.Just.Wrong.in.General.


          A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

          by Pluto on Mon Dec 03, 2012 at 09:12:53 PM PST

          [ Parent ]

    •  We need to return to a truly progressive tax chart (2+ / 0-)
      Recommended by:
      divineorder, wsexson

      like we had from the 1950's through to Reagan.

      Also, I would like to see capital gains tax be truly progressive so it will dampen the zeal to leverage, gamble, and flip assets.

      HISTORICAL TRUTH ABOUT TAXES.  Higher Taxes = lower deficit.  Lower Taxes = higher deficits. The CHART

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Mon Dec 03, 2012 at 07:31:38 PM PST

      [ Parent ]

      •  Agree re capital gains. Tax policy as well as (0+ / 0-)

        regulation needs to be used to control the excessive and irresponsible gambling in the "casino economy."  A transaction tax would help raise needed revenue and also slow down speculative trading.  

        Wall street will scream bloody murder, of course.  I don't know when we'll be able to rally the votes for that kind of tax.  But we do need it.

        --------------------- “These are troubling times. Corporation are treated like people. People are treated like things. …And if we ever needed to vote, we sure do need to vote now.” -- Rev. Dr. William J. Barber

        by Fiona West on Tue Dec 04, 2012 at 12:00:03 PM PST

        [ Parent ]

  •  ...one thing I keep hammering... (5+ / 0-)

    ...is that any person who has a job pays 15.3% in payroll taxes.  That's before they pay any income taxes at all.

    The Mitt Romney's of the world don't pay that on capital gains...if and when they even take any realized gains.  It amazes me to see hoe many people simply don't even know that...we have to really keep that out there.

    Thanks MB...

    Ignorance is bliss only for the ignorant. The rest of us must suffer the consequences.

    by paradise50 on Mon Dec 03, 2012 at 06:19:50 PM PST

    •  I think it's half that, the employer pay other 1/2 (1+ / 0-)
      Recommended by:
      DSPS owl

      The best growth in US history was under Eisenhower's tax schedule.  The top earners paid 90% !!

      THIS LINK SHOWS THE TAX RATES FOR EVERY YEAR SINCE 1913

      It's interesting.  Single people didn't used to have pay higher taxes than married people.  I think that changed after WWII so people wouldn't divorce.

      In 1913, just about everyone but the uberly wealthy paid 1% income tax on income ranging from $0 - $453,292.  That was a flat tax for sure.

      It jumped a lot in 1918, WWI and NOSEDIVED in 1920 but JUST FOR THE RICH, followed by the GREAT Depression.  Low taxes on the high earners fosters speculation, duh!

      Today, less than 1% of US income earners earn more than $250,000.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Mon Dec 03, 2012 at 07:40:45 PM PST

      [ Parent ]

  •  And lost wealth, savings, & earning power; it was (1+ / 0-)
    Recommended by:
    Dr Erich Bloodaxe RN

    & is a bad deal.

    (R's) take those tired memes and shove 'em, Denise Velez Oliver, 11/7/2012.

    by a2nite on Mon Dec 03, 2012 at 06:49:55 PM PST

  •  Progressive fines would be an interesting start. (1+ / 0-)
    Recommended by:
    divineorder

    Speeding ticket? 0.1% of income for the year, or roughly a third of a day's wages.  So $20ish for minimum wagers, but a million bucks for your billion dollar a year hedge fund guy...

  •  Can you explain, MB, how our economy has (1+ / 0-)
    Recommended by:
    War on Error

    improved by lowering the tax rates?

    Are the poor "richer"?   Are their fewer people in poverty?

    All we have done is mortgaged ourselves so we will never get out of debt.

    Mitt Romney's moral compass points to the Cayman Islands.

    by captainlaser on Mon Dec 03, 2012 at 07:07:15 PM PST

  •  During a recent conversation (3+ / 0-)
    Recommended by:
    cany, Meteor Blades, DSPS owl

    with my dad, I discovered that my hourly pay today is only about one dollar more than what he was making as a plant manager 30 years ago.

    Meanwhile, prices for everything from milk to gas has gone up. This is normal, but middle-class incomes have failed to keep up.

    Also meanwhile, corporate CEOs are getting richer and richer. And where's that extra money coming from? From what should have been equitable wage increases for the workers who really keep businesses humming.

    These modern robber barons have stolen the futures of two generations of the American middle class. They must be held accountable (and not just for this, but for all the other damage they've caused).

    Tax-rate restoration should be just the BEGINNING of a middle-class counter-offensive against the thieves of the American dream.

    There are two types of Republicans: millionaires and suckers.

    by Phil T Duck on Mon Dec 03, 2012 at 07:26:06 PM PST

    •  one place to start - (0+ / 0-)

      from the main post above:

      "Payroll taxes have gone up for all, but not as much for the rich because of the earning cap Social Security, now at $110,100..."

      I say we raise the FICA earning cap to $150,000 or $200,000 the solvency issue at Social Security and Medicare would be much closer to resolution.  
      One simple fix.  Major political courage.

      "Life can only be understood backwards, but it must be lived forwards." ~Soren Kierkegaard

      by Beastly Fool on Tue Dec 04, 2012 at 10:07:42 AM PST

      [ Parent ]

    •  I will never make what my dad (0+ / 0-)

      made, even in terms of unadjusted $, and I have more education and a similarly white collared job. Granted, I'm a public employee, but he worked for IBM, so his bennies and mine are pretty much equivalent . . .

      "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

      by bryduck on Tue Dec 04, 2012 at 01:20:29 PM PST

      [ Parent ]

  •  Not really correct (1+ / 0-)
    Recommended by:
    Buckeye Nut Schell

    Many Americans, over the past 30 years, have gotten older, and tended to move up the seniority etc ladder.  Also, inflation has on occasion tended to shove people into higher tax brackets.  And for the upper middle class, Alternative Minimum Tax calculations occasionally have amusing outcomes. Thirty years ago, many readers were still students in the bottom or no tax bracket.  That's no longer true for some of us.

    We can have change for the better.

    by phillies on Mon Dec 03, 2012 at 07:27:21 PM PST

    •  uhmmm... (1+ / 0-)
      Recommended by:
      divineorder
      Many Americans, over the past 30 years, have gotten older
      State the obvious much?

      (Just kidding)  Part of the problem is when President Clinton adjusted the CPI and slowed the way we measure inflation.  Actual yearly inflation is almost three times as much as current measures indicate.  This means that when they show incomes adjusted for inflation, the reality is that it is far worse than the are showing.

      "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

      by Buckeye Nut Schell on Mon Dec 03, 2012 at 07:40:50 PM PST

      [ Parent ]

  •  This is a companion piece Laura's story (4+ / 0-)

    that appears just below this one.  Together, they make clear that the GOPs insistence that ordinary working (and out-of-work) Americans must make the sacrifices to balance out even more tax cuts for the mega-rich is outrageous, immoral and based upon a spectacularly egregious lie.  The 1% are not "job creators."  They didn't "build that."  They don't' suffer "uncertainty."  They are takers and keepers and hoarders.  The rest of the country are the doers.  The workers.  The builders.  The helpers.  The support structure of the whole country.

    The top earners have had a nice long run of getting more than their share.  It's time to change the equation.  Period.

    “If we, citizens, do not support our artists, then we sacrifice our imagination on the altar of crude reality and we end up believing in nothing and having worthless dreams.” ~ Yann Martel, Life of Pi

    by SottoVoce on Mon Dec 03, 2012 at 07:46:57 PM PST

  •  and corporations most of all (1+ / 0-)
    Recommended by:
    DSPS owl

    This is the most despicable fact of our times.

    Since the Reagan assault on government, neo-cons have wrapped themselves in the flag and pounded on the bible while extolling greed and scheming to drown government in the bathtub.

    With Democratic "compromise" support, taxes have been cut, but at what cost?   Bridges collapsing, wilderness vanishing, the gulf poisoned and international competitors enboldened.

    Interest paid to China and others ballooning
    http://money.cnn.com/...

    Meanwhile, republicans take bogus "pledges" and hide assets in tax havens - with ex-presidents boondoggling there!

    There is a word for plotting the destruction of the government, and it is not "patriot"!

  •  Raise the social security cap... (2+ / 0-)
    Recommended by:
    DSPS owl, JesseCW

    but don't raise the age for collecting social security or lower the benefits. Here's why...

    Yes, it's true that people are living longer (on average), but the people who are living longer are mostly people who are richer and who have better health care. Rich people live longer. CEOs get organ transplants or knee replacements or blood pressure medicine. Janitors don't. Raise the cap to $250,000 or so (plus or minus a bit) and I'll bet the solvency of SS will be fine for another 50 years.

    “If you misspell some words, it’s not plagiarism.” – Some Writer

    by Dbug on Mon Dec 03, 2012 at 10:48:00 PM PST

  •  Excellent diary, MB. (0+ / 0-)

    Anyone with an open mind who reads this diary cannot help but conclude that taxes need to go up for the rich.  I find the following insightful, though I think that it is worse in reality than it reads in the diary:

    Households earning more than $350,000 paid 20 percent of the nation’s taxes in 2010, 1.37 times their share of total income, while in 1980, those households paid taxes equaling 1.56 times their share of income. The change was larger before the recession, which reduced investment income, as in past recessions.
    It would be really interesting to know how much their share of income and wealth has increased since 1980 while their share of the tax burden has dropped.

    "A candle loses nothing by lighting another candle" - Mohammed Nabbous, R.I.P.

    by Lawrence on Tue Dec 04, 2012 at 01:05:55 AM PST

  •  our "war" never ends (0+ / 0-)

    it just shifts from place to place to relieve the monotony.

    and I wait for them to interrupt my drinking from this broken cup

    by le sequoit on Tue Dec 04, 2012 at 03:50:32 AM PST

  •  Taxes fell on lower incomes because incomes got (0+ / 0-)

    lower.....taxes fell on higher incomes because of tax cuts....

  •  It's important to get the wording right. (0+ / 0-)
    Buffett recently said he'd like to see a minimal effective tax rate of 30 percent on anybody making $1 million and 35 percent on anybody making more than $10 million.
    Actually, 30% on income over a million dollars, and 35% on income over 10 million.

    If you make 1.1 million, it's a big difference.

    I had to explain to a person who makes "a bit more than 300,000" that we're not discussing a hike of 6k (not that a sane person would care) but a hike of about 1k on her yearly income if the tax cuts end.

    Even people who make that kind of cash don't understand how tax brackets work.

    "the Agency continues to verify the non-diversion of declared material at these facilities and LOFs."

    by JesseCW on Tue Dec 04, 2012 at 07:02:29 AM PST

  •  I paid more in taxes than GE (0+ / 0-)

    I was unemployed throughout all of 2010, I had no income except unemployment insurance and no other assets whatsoever. Yet I paid more in taxes than Obama's useless joke of a Job Czar''s corporation, GE.  

    What a fucking joke. Talk about selling us out..............

    I won't be voting for any democrats until they start acting like democrats. I stopped voting for them in 2010 and I've been voting for third party and cartoon characters ever since.

    Third Way neoliberal bullshit needs to die.  Fuck them all.

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