Taxes and Tax Rates - 2008 Federal Revenue and Spending Book of Charts

Federal Revenue and Spending: A Book of Charts

Section 2: Taxes and Tax Rates

Income Tax Receipts Stay Constant Even as Tax Rates Declined

The most dramatic decline in the top individual income tax rate — from 69 percent to 28 percent — occurred during the Reagan Administration, yet tax receipts remained relatively constant.

Corporate Income Tax Receipts Stay Constant Even as Tax Rates Declined

The top corporate tax rate was reduced sharply under President Reagan — from 46 percent to 34 percent. Yet today, with a combined federal and state tax rate of 35 percent, America has one of the highest corporate tax rates in the developed world.

Tax Rates for High-Income Households Have Risen Disproportionately

The share of taxes paid by the top 20 percent of income earners increased by almost 7 percent between 1983 and 2005, while the share paid by the bottom 20 percent of income earners decreased by almost 53 percent.

The Top 10 Percent of Income Earners Paid 70 Percent of Federal Income Tax

The U.S. tax system is highly progressive. The top 1 percent of income earners, by household, paid 39 percent of all federal income taxes in 2005, whereas the bottom 50 percent paid a little over 3 percent. Further, 32 percent of all tax returns filed in 2005 were from people who paid no federal income tax at all.