CBO Releases Tax Shares Study

August 1, 2012

The Congressional Budget Office (CBO) has released a new report looking at various income groups’ share of the federal tax burden and average tax rates.  The report is entitled “The Distribution of Household Income and Federal Taxes, 2008 and 2009.” The study examines all federal taxes, including income, payroll, corporate and excise taxes.

The federal tax burden has declined considerably for all groups over the past four years, but most substantially for those with the lowest incomes.

 

Average   Federal Tax Rates for All Households, by Before-Tax Income Group, 2005 to 2009 (Percent)
Year Lowest   Quintile Second   Quintile Middle   Quintile Fourth   Quintile Highest   Quintile All   Quintiles
2005 5.4 9.9 13.8 17.6 25.4 20.1
2006 5.7 9.9 13.9 17.7 25.4 20.3
2007 5.1 10.3 14 17.5 24.7 19.9
2008 1.5 7.3 11.6 15.6 23.6 18
2009 1 6.8 11.1 15.1 23.2 17.4

 

Source: CBO

Data provided by the study goes back to 1979. The top one percent had a total federal average tax rate of 28.9 percent in 2009, about six percentage points lower than in the mid 1990s and the late 1970s. The average tax burden for all quintiles is about three percentage points lower than in the mid 1990s and the late 1970s. The average tax burden for the lowest quintile is five to six percentage points lower than in the mid 1990s and the late 1970s.

The top 40 percent of taxpayers pay about 86 percent of all federal taxes. The top five percent of all taxpayers pay approximately 40 percent of all federal taxes.

Shares of Federal Tax Liabilities for All Households, by   Before-Tax Income Group, 2005 to 2009 (Percent)
Year Lowest   Quintile Second   Quintile Middle   Quintile Fourth   Quintile Highest   Quintile
2005 1.3 4.5 9.4 17.1 67.6
2006 1.3 4.4 9.2 16.9 68.1
2007 1.2 4.7 9.4 16.8 67.8
2008 0.4 3.8 8.9 17.4 69.2
2009 0.3 3.8 9.4 18.3 67.9

Source: CBO

To read the full CBO report, click here.

For data tables, click here.

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