Marginal Combined Federal Taxes on a Family of Four

I am graphing the marginal combined federal taxes on our single earner family of four with three different combinations of tax rates: 

  1. Income only

  2. Income & Payroll (the employee part of social security and medicare)

  3. Income & Payroll (both the employer and employee part of social security and medicare)

The marginal payroll tax rate for this family was 0 until 1979 when the taxable maximum income subject to the payroll tax was greater than this family's median income.

Keep in mind the Tax Policy Center calculate these rates for:

  •  4 person family including a married couple with one earner
  •  Itemized deductions are assumed to equal 23 percent of income through 1986 and 18 percent of income thereafter

Data: Historical Combined Income and Employee Tax Rates for a Family of Four; Historical Social Security and FICA Tax Rates for a Family of Four 

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Average Federal Taxes on Family of Four

USFamilyAverageTaxRates.png

Another graph with the data from the Tax Policy Center this time the average combined federal tax rate on our proverbial family of four with three different incomes.

Data: Historical Combined Income and Employee Tax Rates for a Family of Four, also including Employer Tax Rates  

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BTW, I just wanted to let you know that over the next 6-months I am taking on taxes in the United States. I hope to create a collection of visualizations not unlike what I did with An Illustrated Guide to Income. If you wish to support this project and get a first look at the graphs as I make them, make a monthly pledge on Patreon.

 

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Combined Federal Marginal Tax Rates on Family of Four

Often in visualizations of taxes, inculding mine, the focus is on the highest rate on the highest incomes. The Tax Policy Center calculated the combined federal tax rate on a median income family. To compare I have include the combined tax rate for family with twice the median income.

The rate is the margainal combined Federal Income and Social Security and Medicare (FICA) Employee and Employer Tax Rates. I think of this rate as for a self-employed earner since they have to pay both employer and employee taxes themselves.

Keep in mind the Tax Policy Center calculate these rates for:

  • 4 person family inculding a married couple with one earner
  • Itemized deductions are assumed to equal 23 percent of income through 1986 and 18 percent of income thereafter

Data: Historical Combined Income and Employee Tax Rates for a Family of Four, also including Employer Tax Rates

 

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Voting in 2016 US Presidential Election

I was inspired to make this visualization with the upcoming Inauguration and by the Market for Labor visualization, I made for my Income book. 

I took the same approach with this visualization, using the data from the Cook Political Report which tallied popular votes cast for president and the US population and the % of children data from the US Census Bureau Quickfacts page

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Federal Revenue and Top Tax Rates

USTaxRatesMainSources2015.png

What caught my attention with this Federal revenue dataset was the reversal of the social insurance taxes and the corporate taxes in their relative importance to the Federal government. So what are the tax rates? I revisited my tax poster from a few years ago to make a companion graph about the highest tax rates but that is not the whole story. What is missing is who (and how many) actually paid these top rates. BTW, the individual and corporate rates are the top marginal rate, while the Social Insurance and Retirement tax is capped beyond which you don't pay any additional taxes (it was $118,500 in 2015).

Data from Office of Management and Budget, Historical Tables, Table 2.3 and from Tax Policy Center statistics and their tax fact site.

 

BTW, if you pledge on Patreon you will get access to high-resolution files and a sneek peek at my work.

 

 

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