Figure C

Bottom 80 percent has lost ground even as their tax rates have been cut: Pretax income of bottom 80 percent of households as a share of average overall income, and their effective tax rate

Year Average tax rate, household-weighted Average tax rate, income-weighted Ratio of bottom 80 percent income to overall income
1979 5.4% 7.087735% 0.717207
1980 5.8 7.588673 0.715819
1981 6.1 7.954389 0.713154
1982 5.5 7.157304 0.702456
1983 5 6.488404 0.685827
1984 5 6.442562 0.686289
1985 5 6.422246 0.675587
1986 4.9 6.404339 0.64726
1987 4.2 5.68925 0.663489
1988 4.1 5.728361 0.645862
1989 4 5.654475 0.64953
1990 4.2 5.732139 0.659244
1991 3.9 5.434177 0.667931
1992 3.5 5.148332 0.654027
1993 3.4 5.020233 0.658211
1994 2.9 4.748616 0.65448
1995 2.9 4.735474 0.650316
1996 2.7 4.68494 0.634896
1997 2.8 4.850235 0.622079
1998 2.5 4.545549 0.613359
1999 2.5 4.627029 0.602273
2000 2.6 4.732896 0.590393
2001 1.6 3.619679 0.62284
2002 1.3 3.262605 0.636236
2003 0.6 2.548484 0.627759
2004 0.7 2.623514 0.612903
2005 0.6 2.577195 0.592456
2006 0.7 2.654884 0.582065
2007 0.8 2.831059 0.583025
2008 -1.4 0.892411 0.610309
2009 -1.5 0.817591 0.635789
2010 -1.2 1.127753 0.621795
2011 -0.2 2.059462 0.622423
2012 -0.1 2.179478 0.59292
2013 0.1 2.33156 0.614271
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Notes: Income of the bottom 80 percent is a simple average of CBO income data for the bottom four fifths of the income distribution. The average of the bottom 80 percent incomes is then divided by the overall average income reported by CBO. Effective income tax rates are both weighted by households and by incomes.

Source: Author’s analysis of data from the Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2013, 2016

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