The nonpartisan Congressional Budget Office (CBO) announced that in 2009, Americans paid the lowest federal tax rates in 30 years. Analysts claim this is partly due to Obama’s tax cuts to combat the recession. The wealthiest Americans had a steep decline in income from 2007-2009 – according to the CBO, household income fell over average 12% and income among the top 1% fell by more than a third.
The CBO calculated the tax rate during 2009 was 17.4%. To put this in perspective, this is a two-point drop from 2007 and 4 point drop from 2009. The average tax rate between 1979 and 2009 was 21% and this includes all forms of federal taxes – income, payroll, and corporate. The “Making Work Pay” tax credit passed in 2009 assisted in delivering reduced tax payments for income earners across the board. The lowest fifth of earners only paid 1% of their before-tax income to the government while the top fifth of earners paid 23.2% (a 1.5% decrease since 2007).
The top 1% of income earners (who make $1.2 million+ annually) paid a 28.9% federal tax rate in 2009. They are the only income bracket to have their taxes rise during that year.
This post is meant to be completely bi-partisan. The numbers listed are merely the figures obtained from the Congressional Budget Office.
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