Effective Federal Tax Rates, 1997 to 2000

August 29, 2003

This Congressional Budget Office (CBO) paper presents estimates of effective federal tax rates—tax burdens measured as a percentage of income—from 1979 through 2000, updating CBO’s October 2001 report Effective Federal Tax Rates, 1979-1997. In addition to providing information for three more years, this analysis employs a revised methodology for combining data from the Bureau of the Census and the Internal Revenue Service that underlie the calculations and consequently revises some of CBO’s previously published estimates. The analysis includes information on the four major federal taxes—individual income taxes; corporate income taxes; social insurance, or payroll, taxes; and excise taxes—separately and in combination. Along with providing the effective tax rate measures, the paper presents estimates of the number of households that pay more income taxes than payroll taxes.