The NUMBERS see to say almost exactly the OPPOSITE of your claim.
No. They don't. Because as I've pointed out the rates go very high, but not for the middle class. People at median income levels did not pay the higher rates, they paid toward the lower end as there top marginal federal income tax rate, and at the same time they could deduct ordinary interest, and they paid much lower payroll tax rates. Currently much of the middle class pays more in payroll taxes than they pay in income taxes, and that's only considering the so called "employee share", when really the so called "employer share" hits them just as much, and should be counted against them. Counting the full burden of the payroll tax today, and a lot of middle class would pay more in payroll tax alone (as a percentage of their income, even more so in real dollars, and obviously in nominal dollars) than their equivalents paid in income taxes in the 60s.
What would YOU use for a definition of "Middle Class"?
I don't know that I have a very precise definition, but someone at the median income level would be middle class, and such people did not pay the higher tax rates in that series of increasing tax rates you posted (from the data at my link).
In 1964 the median family income was $6,569 (see census.gov )
A family with that income paid (see taxfoundation.org ) a marginal rate of 20%, and for most of their income they paid less. And they paid 4% total payroll taxes (on all their income from labor, essentially no deductions, credits, or gradually increasing rates, so the different here is a large factor for the middle class)
Or since you've been talking about the 50s more (even though the point was the 50s and the 60s) In 1955 the median family income was $4,418, and the marginal tax rate on that much income was 22% (which only applied to the top $418 dollars). And they paid 2% payroll tax.
In 2006 the median family income was $58,407 (Again from census.gov ) The marginal tax rate on that was only 15%, so it is lower, the rate applies to a larger portion of their income (It starts at $15100, also unlike in 1964 the rate starts at $0, yes there is a personal deduction, but there also was in the past), and ordinary interest expenses can not be deducted. Then you have to consider the payroll taxes.
Ignoring some points in favor of my argument (interest deduction, the top marginal rate paid by the median taxpayer being paid for a larger percentage of income, the payroll tax applying from the first dollar with no deductions, etc.) for the sake of simplicity you still get
1955 22% federal income tax + 2% payroll tax = 24% total (before state and misc federal taxes which are also higher now)
1964 20% federal income tax + 4% payroll tax = 24% total
2006 15% federal payroll tax + 15.3% payroll tax = 30.3% total.
In all cases the actual federal taxes paid are less than that since the top marginal rate is not applied on all dollars, and since there are deductions, but that point works in favor of my argument since it decreases the portion of the total federal taxes that come from income taxes, while increasing the percentage that comes from payroll taxes (where there has been a massive increase). |
