Average Tax Rates on Salaries up to $1,000,000 [2009]

by Catherine Mulbrandon

in Comparing Tax Rates by Income, VE Infographics

I wanted to try out the new Tableau Public so I took the Average Tax Rates I calculated for my Comparing Rates by Income series and created this little graph. A couple disclaimers: I am assuming standard deduction and exemptions for the children and/or spouse in each example. Also I am combining all the taxes applied to your salary including: Income, Social Security, Medicare, and Payroll (paid by your employer).

Since this is a live, interactive chart you can hide/show each line using the check boxes at the bottom of the graph.

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Tagged as: Average Tax Rate, Line Graph, Tax Rates, United States

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http://lvtfan.typepad.com LVTfan (google it!)

This would be more useful if you could provide some measure showing what percentage of the population falls into each group. Looking at this, one might tend to think that people/taxpayers were evenly distributed across the spectrum, and of course this is not the case.

Also relevant would be to show what percentage of the total salary income goes to taxpayers in each chunk of the horizontal axis.
http://firedoglake.com/2010/10/17/tax-the-rich-now/ Karen Hurtz

Taxes are a math riddle alright; they never seem to be accurately displayed in these sort of things. I think the part of the chart that’s always missing is the top. There are six different rates in the first $400,000 of income; after that it flat lines.

That’s the scam. There’s no logical basis for an incremental tax system to stop incrementing. Just $30,000 at the bottom of the spectrum can mean the difference between a 10% tax rate and a 25% tax rate (15 percentage points), but add a million dollars and the rate only changes to 35% (10 percentage points. And if you add another $500 million of income the rate only goes up to… Oh, that’s right, it’s still 35%.

Imagine a tax system that kept incrementing so that the guy that made $400M was paying taxes at a higher rate than the poor bastard that only made $195M.
Jeff

I am perplexed at what Karen is talking about. She says there is no “logical basis” for a progressive income tax that tops out at roughly 300 grand. While there may be no “logical” basis for this type of income tax system, there is a solid historical basis for it. Simply put, “soaking” the rich was a failure wherever it was tried.

The American case is as profound as the European cases. Historically, income tax receipts fluctuate more with the economy that with congress changing marginal tax rates. Not only that, the era of the “90%” bracket resulted in the 1969 “Alternative Minimum tax” because, as legislatures found out, you CANNOT “soak” the rich.

The data is simply against Karen Hurtz, and I read her blog on the solution to our debt problems.

Not only has receipts kept steady as a % of GDP, the wealthy pay more as a share today that they did in the past with those high brackets.