August 13, 2010

Effective Tax Rates 1979 to 2007

The Congressional Budget Office has data on distribution of federal taxes.  They plot the effective tax rates from 1979 to 2007.

I took the data from the CBO and plotted the graph below:

*Source CBO.

Looks mostly flat doesn't it?    Note there is a pretty good drop in the effective federal income tax rates from 2000 to 2003 when it went from 11.8% to 8.4%.    Thats about a 28% income tax decline for the average filer.  

This is just the average effective rate for all tax payers.   The effective rates for different income levels are going to be different.