About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

1 Claire M. Hintz, Tax Burden on American Families Rises Again 1 (1997)

handle is hein.taxfoundation/srhexz0001 and id is 1 raw text is: TAX
FOUNDATION
November 1997
No. 74

Tax Burden on American Families Rises Again

In 1997, the tax burden on America's
median income families increased again. This
year federal, state and local taxes combined
are projected to claim 38.2 percent of the
income of a median income two-earner family,
up from 37.3 percent in 1996. For a single-
earner family, total taxes as a percentage of
income are projected to increase to 35.6

Figure 1
Taxes as a Percentage of Income for Median One- and Two-ncome Families
Selected Yeaws, 1955-1997

YOne Income

-      Two Income

o.oo\o  .o\o
Coo\o\ob + '  .

40%
35%
30%
25%
20%
15%
10%
5%
0%

0\o
.o\oa
Coor

1955    1965    1975     1985    1995    1997e

Source: Tax Foundation.

percent, up from 35.5 percent last year.
For the dual-earner family, the tax burden
is approaching its historic high. In 1981,
before the federal income tax reduction and
bracket indexation of the Economic Recovery
Act of 1981 took effect, the dual-income family
used 38.9 percent of its income to pay for its
taxes.
Table 1 charts the historical evolution of
the tax burden borne by median income single
and dual-earner families. The tax burden is
calculated on a decade by decade basis from
1955 through 1985 and yearly thereafter.
Since 1955, the tax burden as a percentage of
income has grown 10.3 percentage points for
two-income families; for single income
families, it has grown almost 9 percentage
points.
As Table 1 shows, after adjusting for
inflation, total taxes on the median income
dual-earner family today are $22,521, nearly
triple 1955's burden when they were $8,089.
In real (inflation-adjusted) dollars, the pro-
jected total tax burden of the median income
two-earner family will be higher than in any
previous year.
For the single-income family, total taxes
(adjusted for inflation) have almost doubled
from $6,024 in 1955 to $11,002 in 1997.
However, the median income single-earner
family will be paying less in real terms by the
standards of the Eighties and Nineties due to
the declining real income of families of this
kind.
The Growth of Taxation
Two forces have driven the increasing
burden of taxation on America's median-
income families in recent years: the growth of
the federal payroll tax and a general increase
in state and local taxation.
Payroll taxes for social insurance have

By Claire M. Iintz
Senior Economist
Tax Foundation

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 3,000 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.



Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most