USA Today: Tax Bills Lowest Since 1950

by Kids Forward | May 12, 2010

Home 9 Tax and Budget 9 USA Today: Tax Bills Lowest Since 1950

A new analysis of federal data by USA Today shows that Americans’ total federal, state and local tax bills in 2009 were the lowest they’ve been since 1950. According to the analysis, federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, well below the historic average of 12% over the last half-century. So despite the media hoopla created by Tea Party protests, the idea that taxes are currently out of hand is simply not grounded in fact.

While the percentage of income consumed by taxes varies considerably based on income level, on average the effective tax rate paid by Americans of all income levels has fallen 26% since the recession began in 2007. That translates to $3,400 in annual tax savings for households of average income paying the average tax rate.

The USA Today article mentions three factors as contributing to the easing of the tax bite in recent years: the federal Recover Act, which included numerous tax reductions, including the Making Work Pay credit that put $800 into the pockets of married couples earning up to $150,000; various progressive tax credits and other changes that helped low- and moderate-income households; and the impact of the recession on consumer spending, resulting in less sales tax collected.

The article goes on to mention that a Gallup Poll last month found that 48% of respondents thought taxes were “too high,” one of the lowest percentages saying so in the last 50 years, which would again seem to fly in the face of conventional wisdom based on Tea Party hype. 45% thought taxes were “about right.”

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