Since 1979, the effective rate paid by the rich has barely moved. Marginal rates are all over the place, but the effective rates stay about the same.

If you look at the Individual Tax Rates chart, you can see how the rich (top quintile) pay the following;

1980: 16.6% (Last Carter Year: Marginal rate was 70%)
1983: 14.1% (Reagan Pkg 1: Marginal rate 28%)
1989: 14.7%
1992: 14.6% (Bush Pkg: Marginal rate 32%)
1994: 15.1% (Clinton Pkg: Marginal rate 39.6%)
2002: 15.6% (Bush Pkg: Marginal rate 35%)
2014: 16% (Obama Pkg: Marginal rate 39.6%)

The marginal rate is another way the media gets us to go to war with each other. The more deductions and credits you have in the tax code, the less the marginal rate matters. Bush dropped the marginal rate, and the effective rate on the top quintile went UP, for crying out loud. The left was screaming about “tax cuts for the rich”, and the data shows that the rich actually paid more under the lower marginal rate. :-)

But to explain to the average American that this tax cut is good for them is disingenuous at best.

Eh. Big asterisk on that one. Everyone wants more money in their pockets, and will always perceive that as “good for them”. Problem is that the government never makes them feel the pain of a loss of services; it just borrows more. So, the average joe senses that tax cuts give him more money, and he doesn’t lose anything in the process. May as well support tax cuts if momma never takes the cookie jar away.

Written by

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.

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