As April 15th looms in the mind of every tax procrastinator's mind, it is again the time of year during which many reflect on the portion of their paycheck that heads to the federal government. There is a lot of hyperbole and misinformation surrounding tax rates. Pundits on both ends of the ideological spectrum like to criticize the difference in rates paid by the wealthy and by the poor, while others focus on an increasing tax burden over time. As the following graph illustrates, much of this is simply dramatization.
The past 35 years have ushered in a considerable drop in the top rate paid by the most wealthy Americans, effectively narrowing the difference between the rates for the 1% and the rates for middle America. While the debate about tax rates shows no sign of cessation, it is interesting to note where President Obama's rates stand in comparison to other presidents. Based on the polarizing nature of much of current debate, one might predict that Obama represents a major aberration from his predecessor, George W. Bush. However, as the graph below indicates, Obama falls just above Bush and just shy of Clinton -- no real deviation from the established norms of the past decade:
This data comes from the Tax Policy Center. The Center is a shared effort of the Urban Institute and the Brookings Institution and is comprised of nationally recognized experts in tax, budget, and social policy who have served at the highest levels of government. Capital gains tax data in the second graph is provided by the Center for Tax Justice, a 501(c)(4) public interest research and advocacy group founded in 1979. The organization focuses on federal, state, and local tax policies, as well as their effect on the United States. The visualizations are created by FindTheBest, a company that works to collect, connect, and structure data.