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A Picture of the Federal Income Tax's Progressivity

Yesterday we growled about tax confusion, based upon a report by Ross Kaminsky in the American Spectator.  In the "thought," which we excerpted, Kaminsky pointed to a Gallup Survey, noting "61 percent of Americans continue to believe that their upper-income friends pay too little."

In an effort to clear up that tax confusion, we point to George Mason University's Mercatus Center's website where Veronique de Rugy has posted a chart, which clearly shows the average effective federal tax rates by income quintile, a statistical measure of five equal proportions. Here's the chart:


You can read Ms. de Rugy's complete explanation of the above chart, but she makes this important point:

"Whether one thinks that the current system is fair, unfair, or just right, there can be little debate that federal income taxes are indeed progressive." (emphasis added)

If you want to see just how much income has been redistributed by the administration of President Obama, compare the above chart to the comparable 2009 chart (here). You will note that four of the income quintiles have seen lower average effective federal tax rates, e.g., a 6% decrease for the middle income quitile, while those in the top quintle have seen their average effective rates increase 7%. According to State of the USA, the income cutoff (in 2009 dollars) for the  20th percentile, or lowest quintile is $20,000; 50th percentile is $50,000; and 80th percentile, or top percentile, is $100,000.

So the next time a liberal and/or progressive politician starts spouting their class warfare rhetoric about the rich not paying their "fair share," you'll be armed with the facts. Kudos to Ms. de Rugy for adding to taxpayers' knowledge about who pays income taxes, and at what rate. She posted two other informative charts the same day -- 1) trends in EITC spending and number of beneficiiaries (here), and 2) trends in after-tax income by household position in income distribution, 2000-2010 (here).


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