Who Got the Biggest Tax Break in the Last 30 Years? (The Rich, of Course)

Since 1980, total tax rates have fallen for each income group -- rich, poor, and everybody in the middle. But who got the biggest break?

This fabulous series of charts from the New York Times offers one answer -- and it exactly the group you're expecting. Total tax rates -- that's federal income + payroll + corporate + state/local -- have gone down for poor and rich alike since 1980.

Screen Shot 2012-12-01 at 4.07.34 PM.png

So, we all get a break. But who got the biggest?

Divide the first by the 2010 rate by the 1980 rate, and you get an answer. Taxes fell 5% for the poorest households. They fell about 7% for the typical household. And they fell 14% for the richest households. It is fair to say that between President Carter and President Obama, taxes have fallen by twice as much for the richest families as for the median family.

Screen Shot 2012-12-01 at 4.13.19 PM.pngWhen it comes to taxes, "fair" is a four-letter word, and one that splits liberals and conservatives. I'd encourage anybody on either side of the debate to go back and study these New York Times graphs to see three points: (1) the richest households pay a growing share of our taxes, because (2) they earn a growing share of national income and (3) the tax code is largely progressive, except for the tippy-top.

______________

*This is true for the mass, mass majority of tax payers. But at the very tippy-top of the income pyramid, it becomes less true. The richest households earn most of their money from capital gains, which are taxed at a lower rate than earned income. In 2009, for example, the average salary of the 400 richest U.S. households was $22 million. Their average capital gains income? $92 million. So that's why the tax code bends back toward regressivity at the very top: We've decided to give investment income a tax break, and the rich happen to earn most of their money from investments.

>

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Never Tell People How Old They Look

Age discrimination affects us all. Who cares about youth? James Hamblin turns to his colleague Jeffrey Goldberg for advice.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Never Tell People How Old They Look

Age discrimination affects us all. James Hamblin turns to a colleague for advice.

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

Video

Pittsburgh: 'Better Than You Thought'

How Steel City became a bikeable, walkable paradise

Video

A Four-Dimensional Tour of Boston

In this groundbreaking video, time moves at multiple speeds within a single frame.

Video

Who Made Pop Music So Repetitive? You Did.

If pop music is too homogenous, that's because listeners want it that way.

More in Business

Just In