With the tax filing deadline tomorrow, it's a good time to consider how much in taxes you actually pay. A common take is that taxes are going up, but only on the wealthiest Americans.
That's true -- technically. But if you look over the last 10 years and consider federal, state and local taxes as a percentage of all income, it turns out that everyone is paying either less or only a tiny bit more than even during the Bush years. Including the wealthy.
Left-leaning think tank Citizens for Tax Justice regularly models and analyzes Americans' total tax burden and breaks the results down by economic strata. Over the last 10 years, citizens at most income levels have seen a decline in the percentage of their income that goes to taxes.
CTJ breaks the populace down into groups based on average cash income (ACI) and then calculates all taxes as a percentage of income. Here are the seven groups and their corresponding tax percentages for the 2004 estimate:
Lowest 20 percent -- ACI of $10,400, taxes were 19.7 percent of income
Second 20 percent -- ACI of $21,200, taxes were 23.3 percent of income
Middle 20 percent -- ACI of $34,500, taxes were 27.0 percent of income
Fourth 20 percent -- ACI of $56,300, taxes were 29.8 percent of income
Next 15 percent -- ACI of $96,700, taxes were 31.6 percent of income
Next 4 percent -- ACI of $201,000, taxes were 32.2 percent of income
Top 1 percent -- ACI of $978,000, taxes were 32.8 percent of income
Again, that factors in all taxes, including state and local. The 2014 estimate expanded to eight categories, with a little more differentiation toward the top:
Lowest 20 percent -- ACI of $14,000, taxes were 19.1 percent of income
Second 20 percent -- ACI of $28,400, taxes were 22.9 percent of income
Middle 20 percent -- ACI of $45,500, taxes were 26.9 percent of income
Fourth 20 percent -- ACI of $75,100, taxes were 30.0 percent of income
Next 10 percent -- ACI of $115,000, taxes were 31.5 percent of income
Next 5 percent -- ACI of $162,000, taxes were 32.3 percent of income
Next 4 percent -- ACI of $283,000, taxes were 32.6 percent of income
Top 1 percent -- ACI of $1,542,000, taxes were 33.3 percent of income
Although taxes for the top 40 percent of the population did go up over 10 years, the increase was slight. For everyone else, taxes decreased as a percentage of their income. How much of a tax burden does the richest 20 percent carry? Their share of total income was 60.1 percent, and they paid 64.3 percent of all taxes -- more than their share of revenue, but not by much.
To put it differently, the U.S. has a much less progressive tax structure than many think when you look beyond just income taxes. One major factor is payroll taxes. Although many people in the U.S. pay no federal income tax, they still pay Social Security and Medicare levies. Plus, Social Security has a cap of $117,000 in income that can be taxed. That translates into a significant savings for wealthier Americans.
Another factor is the type of income. Money that falls into a capital gains category is usually taxed at no higher than 15 percent, with a few exceptions.
If none of this seems consoling, then think of how much more you keep than much of the rest of the industrialized world. According to the Organization for Economic Co-operation and Development (OECD), the U.S. was 25th in tax burden for an average, single worker. Only nine countries had a lower tax burden: Canada, Australia, Ireland, Switzerland, South Korea, Israel, Mexico, New Zealand and Chile.