Personal finance writer Kathy Kristof and a team of accountants have pooled their knowledge to produce an easy-to-use, step-by-step guide to completing your federal tax forms. Sharpen your pencil and turn to pages D10 and D11.
Tax Bite
Over the last half century, the federal tax burden on individual taxpayers has grown explosively--and the overall take of the U.S. government has surged, as well. A massive expansion of Social Security taxes, imposed from the first dollar earned by workers, has made the system steadily more regressive. Meanwhile, shifts in the tax code have shrunken the burden on corporations. GROWING TAKE and SHIFTING BURDEN
(Millions of dollars, inflation-adjusted) Year: 1940 Total Taxes: $65,630 Individual Income (Individual): 13.6% Social Insurance* (Individual): 27.3% Corporate (Business): 18.3% Excise** (Business): 30.2% Other*** (Business): 10.7% Total in 1940 dollars: $6,549,000,000
Year: 1950 Total Taxes: $229,620 Individual Income (Individual): 39.9% Social Insurance* (Individual): 11% Corporate (Business): 26.5% Excise** (Business): 19.1% Other*** (Business): 3.4% Total in 1950 dollars: $39,443,000,000
Year: 1960 Total Taxes: $438,404 Individual Income (Individual): 44% Social Insurance* (Individual): 15.9% Corporate (Business): 23.2% Excise** (Business): 12.6% Other*** (Business): 4.2% Total in 1960 dollars: $92,492,000,000
Year: 1970 Total Taxes: $697,186 Individual Income (Individual): 46.9% Social Insurance* (Individual): 23% Corporate (Business): 17% Excise** (Business): 8.1% Other*** (Business): 4.9% Total in 1970 dollars: $192,807,000,000
Year: 1980 Total Taxes: $880,477 Individual Income (Individual): 47.2% Social Insurance* (Individual): 30.5% Corporate (Business): 12.5% Excise** (Business): 4.7% Other*** (Business): 5.1% Total in 1980 dollars: $517,112,000,000
Year: 1990 Total Taxes: $1,107,058 Individual Income (Individual): 45.3% Social Insurance* (Individual): 36.9% Corporate (Business): 9.1% Excise** (Business): 3.4% Other*** (Business): 5.4% Total in 1990 dollars: $1,031,308,000
Year: 1993 Total Taxes: $1,147,588 (estimated) Individual Income (Individual): 44.5% (estimated) Social Insurance* (Individual): 38% (estimated) Corporate (Business): 9.2% (estimated) Excise** (Business): 4.1% (estimated) Other*** (Business): 4.2% (estimated) Total in 1993 dollars: $1,031,308,000,000 (estimated) * Social Security taxes, plus Medicare taxes for 1970 and later years. ** Excise taxes apply to alcohol, tobacco and telephones. *** Includes estate and gift taxes, customs duties and fees.
Source: "Budget Baselines, Historical Data and Alternatives for the Future," Office of the President, Jan. 1993
A World of Difference
Nonetheless, the total tax burden on Americans--including federal, state and local income and personal property taxes--is among the lowest in the industrialized world. Tax Revenue as a percentage of Gross Domestic Product, 1990 Sweden: 56.9% France: 43.7 Italy: 39.1 Germany: 37.7 Canada: 37.1 United Kingdom: 36.7 Switzerland: 31.7 Japan: 31.3 United States: 29.9 Turkey: 27.8
Average of 24 nations in Organization of Economic Cooperation and Development: 38.8%
Source: Organization of Economic Cooperation and Development
