A while ago I put together a spreadsheet of the tax rates that people at different income classes paid and kept meaning to post it once I looked at similar data from the 1950s or 1960s, when the actual tax rates that the wealthy paid were much higher. However, with the latest Romney clandestine video, it seemed a fitting time to post it.
The data is from 2007 and it includes Federal, State and Local taxes. My sources were:
- Federal – http://www.cbo.gov/publications/collections/tax/2010/AverageFedTaxRates2007.pdf
- State & Local – http://www.itepnet.org/whopays3.pdf
You can find my google spreadsheet with all of the numbers (as well as some extrapolations if you remove certain tax breaks) here. I had to do some calculations to break out some of the higher income ranges for the Federal data, but the computations are pretty straightforward.
Before I go to the charts, a bit of commentary.
State taxes, especially sales and property, are regressive and that helps to skew the taxes so the poor pay more and the wealthy less. Some states have a high enough income tax to offset that disparity, but many states do not have an income tax, or have a flat tax, such Massachusetts.
FICA (Social Security, Medicare, etc.) taxes are payroll taxes that only apply to wage income, but the total amount a tax payer has to pay is capped at $110,100 of income (as of 2012). However, the Earned Income Tax Credit helps to offset the FICA taxes and you can see that from the Federal tax rate chart below where income tax rates are negative for those earning less than $18,000. Also, the long-term capital gains taxes are paid at a flat rate that is not progressive, unlike Federal income taxes which rise with the income of the tax payer.
These issues, as well as others, ensure that the tax rates the wealthy pay are not that much higher than someone in the middle class.
On to the summary charts.
State, Local & Federal Tax Rate by Income Range
State & Local Tax Rate by Income Range
Federal Tax Rate by Income Range