"Tax Foundation (?) so called data"
TAX FOUNDATION FIGURES DO NOT REPRESENT TYPICAL
HOUSEHOLDS’ TAX BURDENS
Figures May Mislead Policymakers, Journalists, and the Public
By Chuck Marr and Chye-Ching Huang
The Tax Foundation released its annual “Tax Freedom Day” report today that, once again, leaves a strikingly misleading impression of tax burdens - announcing an “average” tax rate across the United States that’s likely higher than the tax rate that 80 percent of U.S. households actually pay.
To project the day when Americans will have “earned enough money to pay this year’s tax obligations at the federal, state, and local levels,”1 the Tax Foundation calculates the “average” tax rate by measuring tax revenues as a share of the economy (similar to estimates of total revenues as a share of Gross Domestic Product, or GDP). Its report suggests the “average” household pays this “average” tax rate.
In reality, in a progressive tax system like that of the United States, only upper-income households (the top 20 percent) pay tax at rates that are equal to or above revenues as a share of the economy. The non-partisan Congressional Budget Office and other authoritative sources show that low- and middle-income (the other 80 percent) pay a smaller share of their income in taxes than the Tax Foundation report implies.
1 Tax Foundation Release “Tax Freedom Day® to Arrive April 17 in 2012”, announcing William McBride, “Tax Freedom Day 2012” Tax Foundation Special Report No. 198, April 2012.
HOUSEHOLDS’ TAX BURDENS
Figures May Mislead Policymakers, Journalists, and the Public
By Chuck Marr and Chye-Ching Huang
The Tax Foundation released its annual “Tax Freedom Day” report today that, once again, leaves a strikingly misleading impression of tax burdens - announcing an “average” tax rate across the United States that’s likely higher than the tax rate that 80 percent of U.S. households actually pay.
To project the day when Americans will have “earned enough money to pay this year’s tax obligations at the federal, state, and local levels,”1 the Tax Foundation calculates the “average” tax rate by measuring tax revenues as a share of the economy (similar to estimates of total revenues as a share of Gross Domestic Product, or GDP). Its report suggests the “average” household pays this “average” tax rate.
In reality, in a progressive tax system like that of the United States, only upper-income households (the top 20 percent) pay tax at rates that are equal to or above revenues as a share of the economy. The non-partisan Congressional Budget Office and other authoritative sources show that low- and middle-income (the other 80 percent) pay a smaller share of their income in taxes than the Tax Foundation report implies.
1 Tax Foundation Release “Tax Freedom Day® to Arrive April 17 in 2012”, announcing William McBride, “Tax Freedom Day 2012” Tax Foundation Special Report No. 198, April 2012.