The middle-class economic squeeze is not about rising federal taxes: Average federal tax rate for the middle 60 percent of American households, 1979–2011
| Year | Lower middle class | Middle class | Upper middle class |
|---|---|---|---|
| 1979 | 14.5% | 18.9% | 21.5% |
| 1980 | 14.1% | 18.9% | 21.8% |
| 1981 | 14.7% | 19.2% | 22.3% |
| 1982 | 13.5% | 17.9% | 20.6% |
| 1983 | 13.4% | 17.4% | 20.2% |
| 1984 | 14.3% | 17.8% | 20.3% |
| 1985 | 14.5% | 18.0% | 20.4% |
| 1986 | 14.3% | 17.9% | 20.5% |
| 1987 | 13.5% | 17.4% | 20.2% |
| 1988 | 13.8% | 17.8% | 20.6% |
| 1989 | 13.5% | 17.7% | 20.6% |
| 1990 | 14.1% | 17.7% | 20.6% |
| 1991 | 13.5% | 17.3% | 20.5% |
| 1992 | 12.9% | 17.1% | 20.2% |
| 1993 | 12.7% | 17.1% | 20.3% |
| 1994 | 12.5% | 17.1% | 20.5% |
| 1995 | 12.7% | 17.1% | 20.6% |
| 1996 | 12.6% | 17.0% | 20.5% |
| 1997 | 12.8% | 17.3% | 20.7% |
| 1998 | 12.3% | 16.6% | 20.6% |
| 1999 | 12.6% | 16.6% | 20.6% |
| 2000 | 12.4% | 16.5% | 20.6% |
| 2001 | 10.9% | 15.0% | 18.9% |
| 2002 | 10.3% | 14.4% | 18.3% |
| 2003 | 9.4% | 13.6% | 17.4% |
| 2004 | 9.6% | 13.7% | 17.4% |
| 2005 | 9.9% | 13.8% | 17.6% |
| 2006 | 10.1% | 14.0% | 17.8% |
| 2007 | 10.3% | 14.0% | 17.5% |
| 2008 | 7.3% | 11.6% | 15.6% |
| 2009 | 6.7% | 11.1% | 15.0% |
| 2010 | 8.1% | 12.6% | 16.9% |
| 2011 | 7.9% | 12.3% | 16.5% |
Lower-middle households are those in the second income quintile, middle households are the middle income quintile, and upper-middle households are the fourth income quintile.
Lower-middle households are those in the second income quintile, middle households are the middle income quintile, and upper-middle households are the fourth income quintile.
Tax rates for 2011 are adjusted so that the temporary 2 percentage point payroll tax holiday in that year is not reflected in rates shown in the chart. For each quintile we multiplied the share of total income accounted for by cash wages and salaries (the tax base of the payroll tax) by the 2 percent payroll tax rate reduction to calculate the effect of the temporary holiday on rates. We then added this amount back to the official 2011 effective tax rates to neutralize the holiday’s effects.
Source: EPI analysis of data from the Congressional Budget Office (2014)