Federal taxes on middle-income Americans are near historic lows, according to the latest available data. That’s true both for federal income taxes and total federal taxes.
- Income taxes: A family of four in the exact middle of the income spectrum will pay only 5.6 percent of its 2011 income in federal income taxes, according to a new analysis by the Urban Institute-Brookings Institution Tax Policy Center. [3] Average income tax rates for these typical families have been lower during the Bush and Obama Administrations than at any time since the 1950s, as Figure 1 shows. (As discussed below, 2009 and 2010 were particularly low because of the temporary Making Work Pay Tax Credit.)
- Overall federal taxes: Overall federal taxes — which include income as well as payroll and excise taxes — on middle-income households are near their lowest levels in decades, according to the latest data from the Congressional Budget Office (CBO).
