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Distribution of Federal Taxes

CBO regularly analyzes the distribution of incomes and federal taxes. For households with different levels of income and in various demographic groups, the agency reports estimates of average federal tax rates (federal taxes divided by income), shares of total federal taxes paid, and other metrics for total federal taxes and for the separate major sources of federal tax revenues.
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Taxation of Owner-Occupied and Rental Housing: Working Paper 2012-14

working paper

November 5, 2012

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Abstract

Larry Ozanne

This paper illustrates how the different tax treatments of owner-occupied and rented houses affect the relative costs of owning and renting. In the examples, a representative landlord computes the rental rate (the ratio of the rent to the value of the house) required to break even on an investment in a house. Potential homeowners compare that market rental rate as a tenant with an implicit rental rate that reflects the cost of owning a home.

The tax advantages tend to make owning more advantageous than renting for higher-income households, but lower-income households can find renting cheaper than owning. The paper also illustrates how limiting or eliminating certain tax advantages would change the cost of owning relative to renting. While the precise comparisons are specific to the conditions detailed in the examples, their general implications are broadly applicable.


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Trends in The Distribution of Household Income, 1979–2009

presentation

August 8, 2012

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The Distribution of Household Income and Federal Taxes, 2008 and 2009

Jul 2012 - The recent recession has had a substantial impact on income, the amount of taxes owed, and average tax rates. Changes in households’ before-tax income and average tax rates in 2008 and 2009 were substantial and differed markedly across the income distribution.

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related publications


  • Trends in the Distribution of Household Income Between 1979 and 2007

    October 25, 2011

  • Average Federal Taxes by Income Group

    June 01, 2010
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The Distribution of Household Income and Federal Taxes, 2008 and 2009

report

July 10, 2012

read complete document  (pdf, 300 kb)

related publications


  • Trends in the Distribution of Household Income Between 1979 and 2007

    October 25, 2011
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Trends in the Distribution of Household Income, 1979-2007

presentation

May 17, 2012

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Effective Federal Tax Rates: 1979 to 2001

report

April 1, 2004

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Abstract

Updating the series of historical effective tax rates estimated by the Congressional Budget Office (CBO) and presented in a recent paper, Effective Federal Tax Rates, 1997 to 2000, the following tables provide values for an additional year—2001.

The tables show effective tax rates for the four largest sources of federal revenues--individual income taxes, corporate income taxes, payroll taxes, and excise taxes--as well as the total effective rate for the four taxes combined. The tables also present average pretax and after-tax household income; counts of households; and shares of taxes, income, and households for each fifth (quintile) of the income distribution and the top percentiles of households.


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  • Additional Data

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  • effective tax rates
  • share of taxes paid
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  • average after-tax household income
  • shares of before tax income
  • shares of after tax income
  • income ranges for each income class
  • all of the above information

  • Supplemental Material

  • distribution of income, households with children
  • distribution of income, elderly households
  • distribution of income, nonelderly childless households
  • households paying more in payroll taxes than income taxes
  • median before-tax and after-tax income
  • sources of income, by income category
  • Historical Effective Tax Rates, 1979 to 2005: Supplement with Additional Data on Sources of Income and High-Income Households

  • Additional Analyses

  • data sources and assumptions
  • Effective Tax Rates: Comparing Annual and Multiyear Measures
  • Effective tax rates
  • blog post
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Data on the Distribution of Federal Taxes and Household Income

report

April 6, 2009

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Abstract

This page contains CBO's most recent estimates of federal effective tax rates (taxes as a percentage of income) across household income groups for the four largest sources of federal revenues—individual income taxes, social insurance (payroll) taxes, corporate income taxes, and excise taxes—as well as the total effective rate for the four taxes combined. The page also contains estimates of average before- and after-tax household income, counts of households, and shares of taxes, income, and households for each income group; information relating to the methodology used to construct the estimates; supplementary estimates for different household types; and a comparison of income and payroll taxes.

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Effective Federal Tax Rates, 1979-1997

report

October 1, 2001

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Abstract

This Congressional Budget Office (CBO) study examines effective federal tax rates—tax liabilities measured as a percentage of income—over the 1979–1997 period for all households and for quintiles, or fifths, of the income distribution. The analysis uses a comprehensive measure of household income that encompasses not only cash income but also the value of benefits received in kind, such as health care and food stamps. The study provides information on the four major federal taxes: individual and corporate income taxes; social insurance, or payroll, taxes; and excise taxes. It also considers the combination of the four.

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Effective Federal Tax Rates, 1997 to 2000

report

August 29, 2003

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Abstract

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.

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Historical Effective Federal Tax Rates: 1979 to 2002

report

March 1, 2005

read complete document  (pdf, 145 kb)

Abstract

The following tables update the series of historical effective tax rates estimated by the Congressional Budget Office (CBO) by providing values for an additional year—2002. The tables show effective tax rates for the four largest sources of federal revenue—individual income taxes, corporate income taxes, payroll taxes, and excise taxes—as well as the total effective rate for the four taxes combined. The tables also present average pretax and after-tax household income; counts of households; and shares of taxes, income, and households for each fifth (quintile) of the income distribution and for the top percentiles of households.

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