Effective Tax Rates

Steve Benen is hoping to break into the lucrative world of chart-blogging so he made this one based on a table from a Bruce Bartlett column. It shows the effective federal income tax rate paid by the median family in a number of different years:


This is part of the reason why I think Barack Obama’s pledge to eschew any tax increases whatsoever on the bottom 95 percent of the population was fundamentally misguided. Raising taxes on the rich, as per his proposal, is a very good idea. And there’s no need to raise taxes on anyone amidst the current recession. But in the long run we’re going to need more revenue than Obama’s budget calls for. Broader tax increases that might bring the median family’s effective rate back to where it was in the Reagan years could raise impressive sums of money. The bulk of that money would be coming from the wealthiest households, and the impact of the expenditures would be highly egalitarian.