From the Bimbo cartoon “The Bum Bandit” (1931), Fleischer studio- not mickey mouse!

Effective U.S. Tax Rates Across Time

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Jim has run the numbers to show effective tax rates (including Social Security and Medicare taxes) over the past 60 years or so. It’s a fascinating look at how taxes have changed over time.

Interesting to look at.

It seems weird that the total effective tax rate on Jim’s median family was lowered during the Carter administration to only rise even higher during the Reagan administration before falling again at the end of his second term. The Bush Jr. tax cuts were indeed tax cuts: Jim’s definition of a “median” family is indeed paying less in taxes.

It turns out that Medicare and Social Security make a big change in what total taxation looks like, at least for this median family.

And there’s the problem with these numbers: the median family looks different across time, and different family types pay higher rates than others over time. It’s a much larger set of analyses but one that’s probably worth doing. I’ve seen some of these over the years and, not surprisingly, there are certain birth cohorts that seem to always get more than they pay in, across their lifetimes. It was interesting to see how a married family with male head-of-household rates changed as different cohorts passed the age of childbearing. Inflation-adjusted incomes are also interesting to track over time by birth cohort.

This is a reminded that I really should take a look into this, but as no one is paying me for it, likely I won’t. But it really should be looked into. There have been findings showing “generation X” shouldering greater tax burdens at similar income levels (remembering that GenX the first downwardly mobile generation in the U.S. since the 1870s).

This stuff is really fascinating. Partly because the numbers make more sense if you stop thinking Liberal vs. Conservative and start thinking generation vs. generation. There is a huge amount of data out there: I just wish someone had run the numbers I wanted. Perhaps Wolfram|Alpha?

For other people running numbers, you can see:

Tax Foundation on Clinton vs. Bush Jr. tax rates (federal only, seems to exclude the transfer of wealth to the elderly)
U.S. Congressional Budget Office: Historical Effective Federal Tax Rates: 1979 To 2002 (excludes social tax from main number)
Nice graphic on taxes over time in David Leonhardt, “Plain Truth About Tax Cuts“,NY Times (see note on Visualizing Economics about the definition of “top 0.01%”); there’s a lot of great graphics here and it’s worth taking a spin through
Another graphic and point of view at “Guess Who Really Pays the Taxes“,The American: The journal of the American Enterprise Institute
Tax Policy Center has a stunning graphic about the actual rates for the transfer of wealth to the elderly tax (also known as Social Security & Medicare); and see their other links, such as “Historical Combined Income and Employee Tax Rates for a Family of Four

From the Bimbo cartoon “The Bum Bandit” (1931), Fleischer studio — not the famous mouse!

About the Author

Forrest Christian

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E. Forrest Christian is a consultant, coach, author, trainer and speaker at The Manasclerk Company who helps managers and experts find insight and solutions to what seem like insolvable problems. Cited for his "unique ability and insight" by his clients, Forrest has worked with people from almost every background, from artists to programmers to executives to global consultants. Forrest lives and works plain view of North Carolina's Mount Baker.  [contact]

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