Taxes at historic low

Realilty defies perception as pressure persists to maintain or lower U.S. tax rates.
Average tax rate for 12%
Federal income tax one-earner married couples
for family of four with two children with 2009 10
median income 4.63%
The median income for
a family of four has grown 8
from $4,919 in 1955 to
$75,954 in 2009; average 6
taxes paid were lower in
2008 and 2009 than at any 4
other time during that
period and are expected to 2
continue to be low in 2010
0
1960 1970 1980 1990 2000
Source: Median incomes from U.S. Census Bureau, tax rates from Treasury Dept., calculations by the Tax Policy Center

‘Tax Freedom Day’

By what date has the average American earned enough to pay taxes for the year? The Tax Foundation calls April 12,
this “Tax Freedom Day”; below, their estimation on where this day has fallen over the past decade:
2011
January February March April May

19 22 12 13 7 31 9 11 19 21 1
1910 1900 1930 1920 1940 1950 2010 1960 1970 1980, 2000
1990
Taxes at 40-year low
When you consider all federal , state and local taxes
as a percentage of income – including corporate, ... and the first decade of the 21st
35% 35%
sales and miscellaneous taxes – the amount since
2009 has been the lowest since the 1960s. 30 30
25 25
The 20th century ... 27.7% 20 20
33.0%
5.9% 15 27.7% 15
10 10
5 5
0 0
’00 ’10 ’20 ’30 ’40 ’50 ’60 ’70 ’80 ’90 ’00 ’1 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11
Source: Compiled and calculated by the Tax Foundation

U.S. taxes, revenue compared to other countries Are taxes too high?
Other industrialized countries typically tax more – and spend more – than the U.S.: Gallup has asked the following
question in polls since 1956:
Government expenditures Government revenue as a
“Do you consider the amount of federal
as a percentage of GDP percentage of GDP
income tax you have to pay as too high,
about right or too low?”
Canada United Kingdom Germany

43.5% 38.6% 51.0% 41.4% 46.8% 42.8%

1956
55%
35% 1%
Too high Just right Too low

United States France Italy Japan

2010
42.2% 31.6% 56.2% 48.9% 51.4% 46.4% 40.6% 32.9% 48%
45% 3%
Too high Just right Too low

Source: OECD; Congressional Source: Gallup

Research Servicev

60%
U.S. government U.S. government spending
spending as percentage of GDP 50
U.S. government 40
spending continued to
reach new heights in 30
recent years, outpacing
revenue growth, thanks 2010 20
largely to the recession 36.94% 10
and tax cuts – and
leading to a record $1.5 0
trillion deficit in 2010. 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Source: usgovernmentspending.com
Graphic: Brian Moore and Martin Wisckol, The Orange County Register © 2011 MCT