Thursday, December 5, 2013

Top Quintile Of Households Paid 68.8 Percent Of All Federal Taxes, Middle Quintile 9.1 Percent, Bottom Quintile 0.4 Percent In 2010: Government Transfers Increased Percentage Shares Of After-Tax Income Of Lower And Middle Quintiles And Decreased After-Tax Income Share Of Top Quintile: CBO

From Congressional Budget Office, "The Distribution of Household Income and Federal Taxes, 2010" December 4, 2013:
How Were Federal Taxes Distributed in 2010?
The average federal tax rate for all households in 2010—that is, tax liabilities divided by income (including government transfer payments) before taxes—was 18.1 percent. To examine the effect of taxes on households with different amounts of income, CBO divided the nation’s households into five groups of equal size, arrayed by before-tax income. In 2010, the federal tax rate for the bottom quintile of the income distribution was 1.5 percent and that for the top quintile was 24.0 percent (see the figure below). The top 1 percent of all households in the United States had an average federal tax rate of 29.4 percent in 2010.

Higher-income households pay much more in federal taxes than do their lower-income counterparts: They have a much greater share of the nation’s before-tax income, and they pay a much larger proportion of that income in taxes. Households in the top quintile (including the top percentile) paid 68.8 percent of all federal taxes, households in the middle quintile paid 9.1 percent, and those in the bottom quintile paid 0.4 percent of federal taxes. [Emphasis added]

Average Federal Tax Rates By Income Group 2010
Source: CBO

How Did Federal Taxes Affect the Distribution of Income in 2010?
Federal taxes caused the distribution of after-tax income in 2010 to be slightly more even among quintiles than was the distribution of before-tax income. Households in the bottom four quintiles received shares of after-tax income that were about 1 percentage point greater than their shares of before-tax income. For example, households in the bottom quintile received 5.1 percent of before-tax income and 6.2 percent of after-tax income, and those in the middle quintile received 14.2 percent of before-tax income and 15.4 percent of after-tax income. In contrast, households in the highest quintile received 51.9 percent of before-tax income and 48.1 percent of after-tax income. [Emphasis added]

Average Federal Tax Rates By Income Group 1979 To 2010
Source: CBO

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