About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

Recent Trends in the Federal Tax Burden , Record No.: RS20059, Date: March 27, 2000 1 (March 27, 2000)

handle is hein.tera/crstax0498 and id is 1 raw text is: Order Code RS20059 Updated March 27, 2000 CRS Report for Congress Received through the CRS Web Recent Trends in the Federal Tax Burden Gregg A. Esenwein Specialist in Public Finance Government and Finance Division In FY 1999, federal tax revenue measured as a percentage of Gross Domestic Product (GDP) was at a record high level; it is projected to remain at high levels into the future. Yet at the same time, the average federal tax rate within each income group has not risen. That these two seemingly contradictory trends can occur simultaneously is primarily the result of the rapid income growth concentrated at the high end of the income distribution where marginal income tax rates are at their highest, coupled with tax reductions enacted in the Taxpayer Relief Act of 1997. This report discusses these trends and will be updated as newer data become available. Table 1 shows the level of federal tax revenue as a percentage of GDP for selected fiscal years from 1965 through 2005. Table 1. Federal Revenue as a Percentage of Gross Domestic Product (FY 1965 - FY1999 actual - FY2000 and FY2005 projections) 1965 1970 1975 1980 1985 1990 1995 1999 2000 2005 17.00% 19.0% 17.9% 18.9% 17.7% 18.0% 18.5% 20.0% 20.3% 19.80% Source: Congressional Budget Office. The primary contributor to the recent growth in overall federal tax revenue has been the increase in federal individual income tax receipts. While the increase in federal individual income tax receipts can be traced to several factors, the most important has been the across-the-board increase in real incomes which has put proportionately more income into the higher marginal income tax brackets. Of greatest significance has been the rapid growth in income concentrated at the high end of the income spectrum, where marginal income tax rates are the highest. Table 2 shows the change in the shares of adjusted gross income (AGI) and taxes for high income taxpayers in 1993, 1997, and 1998. The data in table 2 indicate that the share of AGI accruing to high income taxpayers grew dramatically between 1993 and 1998. Taxpayers with AGIs in excess of $200,000 saw their share of AGI increase from 14% to over 210% of the total while taxpayers with AGIs in excess of$1 million experienced an increase from close to 5% to over 9% of total AGI. As high income taxpayers' share of total AGI increased so did their share of total Congressional Research Service +* The Library of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most