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Effective Federal Tax Rates, 1997 to 2000
August 2003		 PDF



APPENDIX
C
Households Whose Payroll Taxes Exceed Their Income Taxes, 1979 to 2000

Most households pay more payroll taxes than income taxes. Table C-1 shows the percentage of households whose payroll taxes exceed their income taxes for the 1979-2000 period, breaking down those statistics by household income quintile. The calculations are also shown including both the employer and employee shares of payroll taxes and including only the employee share.

                                               
Table C-1.
Percentage of Households Whose Payroll Taxes Exceed Their Income Taxes, by Household Income Quintile, 1979 to 2000
Income Category 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Households That Pay Either Payroll or Income Taxes
Including the Employee and Employer Shares of Payroll Taxes
Lowest Quintile 97.5 96.7 96.1 95.5 95.7 93.7 95.7 95.8 97.4 97.6 97.6 97.3 97.3 97.4 97.6 98.1 97.9 98.0 97.8 97.7 98.0 97.7
Second Quintile 89.6 87.8 87.5 88.5 88.5 89.7 89.1 89.7 90.8 90.3 90.0 90.7 91.3 91.6 91.6 93.0 92.6 92.4 92.6 92.1 92.0 91.8
Middle Quintile 65.4 56.6 60.3 69.1 75.3 78.1 78.3 78.8 80.5 78.6 79.6 79.1 78.3 80.5 81.0 80.2 81.4 80.7 79.8 78.9 78.2 78.3
Fourth Quintile 30.0 24.8 29.1 38.8 50.1 55.8 59.8 61.3 69.7 71.6 69.8 72.0 73.4 74.6 74.8 75.3 75.1 74.0 73.8 74.9 73.6 73.5
Highest Quintile 7.9 6.6 8.6 13.0 18.6 23.4 25.9 27.0 27.7 30.6 29.0 31.9 33.6 36.2 36.3 36.0 34.3 32.7 30.1 30.0 27.7 26.3
 
  All Quintiles 53.0 49.2 51.1 55.9 61.2 64.6 66.2 67.0 70.0 70.7 70.1 71.3 71.9 73.2 73.4 73.6 73.5 72.7 71.9 72.0 71.1 70.6
 
Including Only the Employee Share of Payroll Taxes
Lowest Quintile 93.6 90.7 89.8 90.7 92.1 89.6 92.6 93.2 95.8 96.3 96.1 95.4 95.7 95.9 96.2 96.9 96.6 96.3 96.2 96.0 96.4 96.1
Second Quintile 45.5 41.1 39.7 47.4 52.0 51.9 54.3 57.3 67.4 69.3 67.8 67.6 70.5 74.5 75.0 76.9 73.7 73.8 72.4 75.0 74.2 74.2
Middle Quintile 14.5 12.4 13.3 16.1 19.1 21.3 22.0 23.7 27.7 29.9 27.4 28.4 29.4 33.8 34.9 34.2 34.4 34.2 31.7 40.7 41.5 41.4
Fourth Quintile 4.5 4.1 4.4 6.0 6.9 8.6 8.8 9.3 9.8 10.7 10.4 11.2 11.4 12.7 13.0 13.1 13.9 13.3 12.8 16.3 16.7 17.0
Highest Quintile 1.7 1.9 2.0 2.9 2.9 3.8 4.1 3.6 2.8 2.6 2.7 3.2 3.8 3.4 3.3 3.2 3.1 3.1 2.9 3.0 3.0 2.8
 
  All Quintiles 26.2 24.6 24.2 26.6 28.5 29.9 30.8 31.8 34.8 36.0 35.2 35.7 36.6 38.4 38.7 38.8 38.8 38.7 37.9 41.4 41.7 41.3
 
Households That Pay Payroll Taxes
Including the Employee and Employer Shares of Payroll Taxes
Lowest Quintile 99.1 99.0 98.7 98.4 98.6 98.1 98.5 99.0 99.3 99.3 99.3 99.2 99.3 99.2 99.3 99.4 99.4 99.3 99.3 99.3 99.4 99.3
Second Quintile 94.6 92.9 93.5 94.6 94.4 94.9 95.1 95.5 96.1 96.0 96.0 96.2 96.2 96.2 96.3 96.8 96.5 96.6 96.7 96.6 96.7 96.8
Middle Quintile 71.6 62.5 67.6 78.5 85.2 87.1 89.3 89.3 91.3 90.3 90.6 90.8 90.5 92.0 91.2 91.6 92.4 91.6 90.9 91.2 91.1 90.9
Fourth Quintile 32.6 27.3 32.5 44.0 55.8 62.6 67.3 69.0 78.1 80.3 78.6 81.2 83.0 84.2 83.5 83.9 83.9 83.1 82.5 82.9 81.2 80.8
Highest Quintile 8.8 7.4 9.8 14.6 20.7 26.0 28.6 29.7 30.4 33.5 32.1 35.2 37.3 39.7 39.8 39.4 37.9 36.4 33.7 33.5 30.9 29.3
 
  All Quintiles 57.2 53.4 56.1 61.7 67.0 70.6 72.6 73.4 76.3 77.3 76.9 78.2 79.0 80.0 79.7 79.9 79.9 79.2 78.4 78.7 77.7 77.2
 
Including Only the Employee Share of Payroll Taxes
Lowest Quintile 95.1 92.7 92.2 93.5 94.8 93.8 95.3 96.2 97.6 97.9 97.8 97.2 97.6 97.7 97.9 98.1 98.1 97.6 97.7 97.6 97.7 97.6
Second Quintile 48.1 43.4 42.4 50.7 55.4 54.9 57.9 61.0 71.3 73.6 72.2 71.6 74.2 78.2 78.7 79.9 76.8 77.1 75.5 78.7 78.0 78.2
Middle Quintile 15.8 13.7 14.9 18.3 21.5 23.8 25.0 26.9 31.4 34.3 31.2 32.5 34.0 38.7 39.3 39.0 39.1 38.8 36.1 47.1 48.4 48.0
Fourth Quintile 4.9 4.5 5.0 6.8 7.7 9.6 9.9 10.5 11.0 12.0 11.7 12.6 12.9 14.3 14.6 14.6 15.6 14.9 14.3 18.0 18.5 18.7
Highest Quintile 1.9 2.1 2.3 3.2 3.2 4.2 4.5 4.0 3.1 2.9 3.0 3.5 4.2 3.7 3.7 3.5 3.4 3.4 3.2 3.3 3.4 3.1
 
  All Quintiles 28.2 26.6 26.6 29.3 31.2 32.7 33.7 34.8 37.9 39.3 38.5 39.1 40.2 41.9 42.0 42.1 42.2 42.2 41.4 45.2 45.5 45.2
Source: Congressional Budget Office.
Notes: A household consists of the people who share a housing unit, regardless of their relationships.
The income measure is comprehensive household income, which comprises pretax cash income plus income from other sources. Pretax cash income is the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits plus taxes paid by businesses (corporate income taxes; the employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes); and employees' contributions to 401(k) retirement plans. Other sources of income include all in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance). Households with negative income are excluded from the lowest income category but are included in totals.
Income categories are defined by ranking all people by their comprehensive household income adjusted for household size--that is, divided by the square root of the household's size. Quintiles, or fifths, contain equal numbers of people.
Individual income taxes are distributed directly to households paying those taxes. Social insurance, or payroll, taxes are distributed to households paying those taxes directly or paying them indirectly through their employers.
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