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2011, Top Statutory Rate President's Top Tax Rate0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
35.0%39.6%
2.0%
2.3%0.9%
Nondeductible Medicare Tax Medicare tax on wages/salaryPEP/Pease provisions reinstated,2011 Expiration of 2001/2003 tax rates,2011
TOTAL = 44.8%
PRESIDENT’S TAX HIKES
SOURCE: IRS, PRESIDENT’S FY2012 BUDGET, HOUSE BUDGET COMMITTEE ESTIMATES
CHART 1
Bottom 50% Top 1% Top 5% Top 25% Top 50%0%
20%
40%
60%
80%
100%
120%Before Tax ReliefAfter Tax Relief
SOURCE: IRS
TAX CODE MORE PROGRESSIVE AFTER TAX RELIEFBREAKDOWN OF TAX BURDEN BY INCOME LEVEL – 2001 VS 2008
CHART 2
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
TOP INCOME TAX BRACKET
TOTAL TAX REVENUE AS PERCENT OF GDP
INCOME TAX REVENUE AS PERCENT OF GDP
TAX REVENUES DO NOT CORRELATE WELL WITH TAX RATES
FISCAL YEAR
CHART 3
SOURCE: HERITAGE FOUNDATION
TAX REVENUES ARE HIGHLY CORRELATED WITH GDP
REAL 2006 GDP ($BILLIONS)
REAL 2006 TAX REVENUES ($BILLIONS)
1950 1960 1970 1980 1990 2000
$3,500
$7,000
$10,500
$14,000
$500
$1,000
$1,500
$2,000
$2,500REAL TAX REVENUE
REAL GDP
CHART 4
SOURCE: HERITAGE FOUNDATION
Lowest Individual Rate Middle Individual Rate Top/Corporate Tax Rate0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10%
25%
35%
19%
47%
66%
25%
63%
88%
200820502081
SOURCE: CBO
CHASING HIGHER SPENDING WITH TAXES(INCREASE IN TAX RATES NECESSARY TO KEEP PACE SPENDING)
CHART 5
1947 1955 1963 1971 1979 1987 1995 2003 2011 2019 2027 2035 2043 2051 2059 2067 2075 208310
20
30
40
50
60
70
80
Spending Tax Revenue
Ch WE ARE IN A SPENDING-DRIVEN DEBT CRISISHISTORIC/PROJECTED SPENDING & REVENUE AS A PERCENTAGE OF THE ECONOMY
SOURCE: OFFICE OF MANAGEMENT AND BUDGET HISTORIC TABLES, CONGRESSIONAL BUDGET OFFICE; PROJECTIONS BASED ON THE CBO’S ALTERNATIVE FISCAL SCENARIO.
CHART 6
Japan U.S. France Spain Italy U.K. Poland Ireland%
5%
10%
15%
20%
25%
30%
35%
40%
45%
SOURCE: ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOP-MENT
CORPORATE INCOME TAX RATESCHART 7
bottom 20% second middle fourth top 20% top 1%$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
WHO BENEFITS FROM TAX LOOPHOLESAVERAGE PER PERSON BENEFIT BY CATEGORY OF EARNERS
SOURCE: TAX POLICY CENTER/IRS
CHART 8
1970 1978 1986 1994 2002 2010 2018 2026 2034 2042 2050 2058 2066 20740%
5%
10%
15%
20%
25%
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Health
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Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
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Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicaid & Other Health
Medicare
Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare
PROJECTED TAX REVENUE
SOURCE: CBO
WHAT DRIVES OUR DEBT?(GOVERNMENT SPENDING AS SHARE OF ECONOMY)
CHART 9