If It Was 1980, You'd Be Paying More in Taxes

Federal taxes down, but state, local taxes up

By Mark Russell,  Newser Staff

Posted Nov 30, 2012 7:06 AM CST

(Newser) – Although many Americans express anger at the seemingly ever-increasing amount they have to fork over to Uncle Sam, most actually paid a lesser amount in 2010 than they would have in 1980, according to an analysis by the New York Times that took into account federal, state, and local taxes. From 1980 to 2010 (the most recent available year), those earning more than $200,000 have enjoyed the largest decline in total taxes as a percentage of income, and 85% of households earning more than $25,000 per year have also seen the percentage of their income that goes to taxes drop. The group that got hit hardest? Those earning less than $25,000, only about half of which have seen their tax burden decline.

While federal tax rates have been cut across the board since 1980, state and local taxes (which typically take a larger percentage of the lowest earners' income) have increased in most of the country, offsetting much of the federal savings—in six states, local tax increases have exceeded the decline in federal rates. Overall, about 31 cents of each dollar earned goes to the government, about the same as in 1980. However, changes to the tax code have seen the taxes paid by a household earning $350,000 fall to 42.1% from 49% (adjusted for inflation). While a household making $22,000 in 2010 paid a much lower percentage—19.4%—that's much closer to what it was for that household in 1980: 20.2%.

Despite growing frustration at tax rates, a study by the New York Times shows most Americans are paying less overall in 2010 than they did in 1980.
Despite growing frustration at tax rates, a study by the New York Times shows most Americans are paying less overall in 2010 than they did in 1980.   (Shutterstock)
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