A USA Today article reports that combined federal, state, and local taxes in the U.S. came to 23.6 percent of personal income in the first quarter of 2011, the lowest level since 1958. In the 1970s through 1990s tax collections averaged 27 percent of income.
The article quotes Robert Bixby of the Concord Coalition saying, “We have a 1950s level of taxation and a 21st-century-sized government,” a pretty good description given that today’s taxes support such things as Medicare that didn’t exist in 1958.
Meanwhile, a recent report (PDF) from Citizens for Tax Justice notes that U.S. taxes aren’t as tilted as one might think toward those best able to pay. It’s true that the federal income tax (which doesn’t include Social Security and Medicare payroll taxes) imposes higher rates on higher-income people (though the tilt toward taxing the well-off is nowhere near so great today as it was under, say, President Eisenhower), but when you take into account state and local taxes and payroll taxes, a lot of the tax collections fall on middle-income persons and the poor.
Asking higher-income people to pay higher taxes has long been seen as a way of equalizing the pain. The same tax rate that would be devastating to people not making enough to pay for food, rent, and medicine for their kids would barely be noticed by Bill Gates or Warren Buffett.
In 2010, Americans in the middle 20% by income paid 25.1% in taxes. The figure for the top 1 percent was only a little higher, 30.0%. The poorest 20% still paid 16.2%.
Some news reports give a different impression by referencing not tax rates by income level but rather total share of tax collections. The richest of the rich have a higher share of wealth and income that at any point in eighty-some years (and far more than in other developed countries). High-income people pay the lion’s share of taxes not because they pay a significantly greater tax rate but because they collect such a disproportionately huge fraction of the national income.