CBO Analysis of Federal Tax Rates: Middle Income Average Effective Tax Rates Have DECLINED.

A new CBO set of reports on effective federal tax rates causes one to wonder about the need for additional tax cuts (and the disconnect between perception and reality). Note that data show is for average EFFECTIVE tax rates, and NOT incremental rates for different tax brackets.

CBO has LOTS of tables and analysis HERE(scroll to bottom).

Director's Blog post with a summary of findings is HERE.

I prepared two graphs HERE with focus on middle income families.

For middle income ("middle quintile") households the graphs illustrate for 1990, 2000, and 2007

1.Effective Average Federal Income Tax rates.(pg 2).

2.Effective Average TOTAL Federal Tax tax rates. (pg 1).

FOR

• Households with Children
• Elderly Households
• Non Elderly Households (w/o children)

In ALL cases in 2007 both the average effective federal income tax rate AND the total average effective federal tax rate has DECLINED from both 1990 and 2000 levels.  

Also in all cases the average effective federal tax rate for the elderly is the lowest, and the average effective federal tax rate is the highest for non elderly without children.

Originally created and posted on the Oregon Housing Blog.