New chart shows how the rich have been paying less in taxes throughout the years
We hear a lot these days about how government spending has led to a deficit that could pose a major long-term threat if it goes unaddressed. It’s true that government has of late grown under both Democratic and Republican presidents. But deficit hawks often sidestep a no-less important trend: In recent decades, tax rates—especially for the rich—have been on the decline by historical standards. Everyone likes getting a tax cut, but it’s worth remembering that the shrinking of tax revenue has contributed to the deficit problem, just as spending has.
So in a nutshell, the chart shows that until around 1940, tax burdens were low for everyone, in historical terms. Then they rose sharply for everyone until about 1970. At that point, the rich and poor began to diverge. Those making around $10,000 to around $50,000 per year enjoyed a comparatively low-tax period in the 70s, but by the early 80s they were taxed slightly higher than the historical average. In the 2000s, their tax rate came back down a bit. By contrast, those making more than roughly $200,000 a year saw a sharp decrease in their tax burden starting in the 80s. That trend has continued to this day.