Which Taxes Fall Most Heavily on Different Income Groups?

March 26, 2007

With the April 17th tax filing deadline approaching we’ve released a new “Fiscal Fact” reminding Americans that federal income taxes—while obviously important—are just one among many federal, state and local taxes paid each year.

What’s often overlooked in discussions of the nation’s tax burden is that the federal individual income tax only accounted for about 26 percent of the roughly $3 trillion of federal, state and local taxes paid in 2004. And for many lower- and middle-income households, non-income taxes such as sales taxes, property taxes and Social Security and Medicare payroll taxes impose a much heavier burden than the federal personal income tax.

Here’s a chart from the piece that answers the following question: “Of every dollar of taxes paid by households, how many pennies go to each type of federal, state and local tax?” The diversity of tax burdens across income groups is pretty striking:

Read the full piece here. FYI, these figures are drawn from our newly released working paper on U.S. tax burdens and the distribution of government spending.


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