- After tax credits and deductions, most people pay between 12% and 31% of their adjusted gross income in federal income taxes
- The amount paid in most tax brackets has decreased over the past decade due to several tax cuts. In 2017, households making:
- Less than 5,000 paid 15% (same as in 2000)
- $25,000 to $75,000 paid 13% (down from 14% to 16% in 2000)
- $100,000 to $200,000 paid 17% (down from 22% in 2000)
- $1-10 million paid 31% (down from 31% to 32% in 2000, followed by a dip to 27%)
- Over $10 million paid 28% (same as in 2000, following a dip to 22-26% from 2003-2012)
- (Note: data not available from IRS after 2017)
How much does the middle class pay in taxes? How much do the wealthy pay in taxes? How much do the poor pay in taxes? Have taxes gotten lower? Have taxes increased?
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- Since 1980 there have been 5 tax cuts and 3 tax increases
- In the 2 years following each change, unemployment has:
- Increased by .26% on average following tax cuts
- Decreased by .1% on average following tax increases
- Tax cuts do not lead to lower unemployment
- Unemployment is primarily the result of recessions
Do taxes cause unemployment? Do tax hikes cause unemployment?
- Average growth in the GDP since 1980 is 2.5%
- Since 1980 there have been 5 tax cuts and 3 tax increases
- In the 2 years following each change, the economy (growth in GDP) has:
- Improved by .3% on average following tax cuts
- Improved by .1% on average following tax increases
- Tax cuts result in a very small increase to the GDP
- Tax increases do not negatively affect the economy
Do tax increases slow growth? To tax cuts increase the GDP? Do tax cuts help the economy?
- The amount of taxes paid on each tax return decreased significantly from 2000 to 2016, across all income brackets (Note: data not available from IRS after 2017)
- The average annual decrease in taxes from 2000 to 2016 (adjusted for inflation in constant 2018 dollars) was:
- $28 for those making less than $5,000
- $1,424 for those making $25,000 to $30,000
- $3,923 for those making $50,000 to $75,000
- $13,921 for those making $100,000 to $200,000
- $148,820 for those making $1-1.5 million
- $2,065,404 for those making over $10 million
- In the same time period the U.S. National Debt more than trippled (from 5.6 Billion to 19.5 Billion)
- This represents a growth from $20,000 per person to over $60,000 per person in the U.S.
- A portion of this is due to the Great Recession (2008 to 2010), however,
- The majority of the increase in the debt is due to insufficient tax revenue to meet increased mandatory spending and defense spending in this time period.
Have tax cuts increased the debt? Do tax cuts pay for themselves?
- The US gets only about 17% of GDP on average in Revenue, compared to 20% of GDP in Spending
- Drops in Revenue have followed most of the tax cuts of Reagan, GW Bush and Trump, significantly increasing the national debt
- Tax Cuts do not pay for themselves
- Tax increases on the wealthy in the early 90’s led to increases in revenue and a balanced budget
The 2017 Trump Tax Cuts resulted in significant loss of revenue from taxes on businesses
- The proportion of federal taxes paid by business income taxes decreased from 9.9% to 6.8%
- The proportion of federal taxes paid by individual income taxes increased from 49.7% to 52.4%
- In the 2 years following the Tax Cuts (2018-2019), the federal deficit grew by another 74%, primarily due to the lost income from these tax cuts
- The 2017 Tax Cuts did not pay for themselves, and did not result in increased employment.