How do these numbers disprove that incomes for the middle and bottom
were stagnant or declined? I mean it is a slightly progressive income
tax scale which would cause the bottom end tax receipts to drop more.
So there was both: tax rate changes and economic decline for the
middle. But the tax rate changes helped the upper more than the lower
(there made it less progressive).
Brad
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
That's not really true. There have been major changes to tax rates
over time. Here are some numbers from the CBO, which I realize make
for a less snappy soundbite but have the virtue of being accurate.
The first panel of the table is the effective tax rate (what people
actually pay, not what's on the books) for the bottom, middle, and top
quintiles and the top 1% for all federal taxes; the second is for the
income tax only. Note the big shift from positive to negative rates at
the bottom (mostly the EITC):
bottom 20% middle 20% top 20% top 1%
all
---
1979 8.0 18.6 27.5 37.0
1984 10.2 18.0 24.3 28.2
1994 6.6 17.3 27.4 35.8
2007 4.0 14.3 25.1 29.5
income
------
1979 0.0 7.5 15.7 21.6
1984 0.7 6.7 14.1 19.3
1994 -3.9 5.3 15.0 23.0
2007 -6.8 3.3 14.4 19.0
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