Historical Tax & Income Data: Some Charts

With several of my co-bloggers raising the issue of how income & federal tax liabilities are distributed among different income levels, I figured I’d reacquaint myself with Microsoft Excel, and gin up some semi-relevant charts.  Fortunately, the Congressional Budget Office already did the heavy-lifting back in December ’08; responding to a query from Sen. Baucus, they drafted a letter[1] providing historical data for various income categories, with particular attention to higher-income ones.  Chart 1 plots the total federal tax liability for each of several income categories, as a % of household income.  Charts 2 & 3 plot the proportion of federal taxes paid by said categories; while Charts 4 & 5 plot the proportion of income earned by each category.

[The last link above is to an Excel spreadsheet containing the raw data I used for these charts.  Just in case anyone wants to check my sums (probably a good idea), or gin up some other charts using different income categories (YMMV).]

Chart 1:  Effective Federal Tax Rates[2]

Chart 2:  Share of Federal Tax Liabilities[3]


Chart 3:  Share of Federal Tax Liabilities (Again)


Chart 4:  Share of Income[4]


Chart 5:  Share of Income (Again)

Update:

It occurred to me that, when drafting the above, I neglected the top 10%.  Chart 6 plots relevant historical stats for that particular category.

Chart 6:  The Top 10%[5]


[1] The CBO publication in question is Historical Effective Tax Rates, 1979 to 2005: Supplement with Additional Data on Sources of Income and High-Income Households (December 2008), available at http://www.cbo.gov/ftpdocs/98xx/doc9884/12-23-EffectiveTaxRates_Letter.pdf (hereinafter Historical Tax Rates).

[2] Data for this chart comes from Table 1 of Historical Tax Rates, under the heading “Total Effective Federal Tax Rate”.  For “Percentiles 81-99”, I calculated – as weighted averages – pre-tax and after-tax incomes for each year, using data from Table 3 regarding numbers of households and average household income for each of “Percentiles 81-90”, “Percentiles 91-95”, & “Percentiles 96-99”.  I did the same for “Top 1%”, using data for “Percentiles 99.0 – 99.5”, “Percentiles 99.5 – 99.9”, “Percentiles 99.9 – 99.99”, & “Top 0.01 Percentile”.

[3] Data for Charts 2 & 3 comes from Table 2 of Historical Tax Rates, under the heading, “Share of Total Federal Tax Liabilities”.  Each datapoint for “Percentiles 81-99” sums “Percentiles 81-90”, “Percentiles 91-95”, & “Percentiles 96-99” for that year.  Each datapoint for “Top 1%” sums data for “Percentiles 99.0 – 99.5”, “Percentiles 99.5 – 99.9”, “Percentiles 99.9 – 99.99”, & “Top 0.01 Percentile”.

[4] Data for Charts 2 & 3 comes from Table 3 of Historical Tax Rates, under the heading, ” Share of Income (Percent)”, and the subheading, “Pretax Income”.  Each datapoint for “Percentiles 81-99” sums “Percentiles 81-90”, “Percentiles 91-95”, & “Percentiles 96-99” for that year.  Each datapoint for “Top 1%” sums data for “Percentiles 99.0 – 99.5”, “Percentiles 99.5 – 99.9”, “Percentiles 99.9 – 99.99”, & “Top 0.01 Percentile”.

[5] As with “Top 1%” in Chart 1, I calculated the “Total Effective Federal Tax Rate” for each year by calculating – as weighted averages – pre-tax and after-tax incomes for each year, using data from Table 3 of Historical Tax Rates regarding numbers of households and average household income for each of Percentiles 91-95″, “Percentiles 96-99”, “Percentiles 99.0 – 99.5”, “Percentiles 99.5 – 99.9”, “Percentiles 99.9 – 99.99”, & “Top 0.01 Percentile”.  I summed the relevant percentages for these categories from Tables 2 & 3 to calculate “Share of Pretax Income” and “Share of Federal Tax Liabilities”, respectively.

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