For the bottom 60% of households—particularly the bottom fifth—the boost from government taxes and benefits has increased as share of income in recent decades: Overall transfer rate by household income group, 1979–2018

Bottom fifth Second from bottom Middle fifth Second from top  81–90th percentile 91–95th 96–99th Top 1 percent
1979 34.5% 5.5% -9.9% -15.6% -19.2% -21.1% -24.2% -33.0%
1980 33.0% 9.1% -8.7% -14.8% -19.0% -20.4% -23.7% -30.8%
1981 31.2% 8.8% -8.8% -14.7% -18.6% -20.3% -22.9% -28.0%
1982 30.9% 12.1% -6.0% -12.1% -15.9% -17.4% -19.7% -24.5%
1983 29.0% 12.8% -4.0% -11.1% -15.0% -16.5% -18.9% -24.9%
1984 24.7% 9.7% -6.2% -11.8% -15.5% -17.0% -19.3% -25.1%
1985 25.2% 10.6% -6.3% -12.0% -15.3% -17.3% -19.4% -24.5%
1986 25.1% 10.7% -5.6% -11.8% -15.7% -17.8% -19.7% -23.4%
1987 31.0% 11.6% -4.3% -12.0% -17.3% -19.7% -22.4% -28.8%
1988 29.3% 11.3% -5.4% -12.5% -17.2% -19.1% -22.0% -27.7%
1989 27.6% 11.5% -5.1% -12.1% -16.7% -18.9% -21.8% -26.9%
1990 26.0% 10.8% -3.9% -11.5% -16.1% -18.3% -21.5% -26.6%
1991 25.9% 13.1% -2.0% -10.0% -15.5% -18.0% -21.6% -27.6%
1992 25.3% 15.0% 0.4% -9.3% -14.7% -18.1% -21.8% -28.5%
1993 25.0% 16.2% 0.9% -8.6% -14.7% -17.7% -22.3% -31.9%
1994 27.6% 16.3% 0.6% -9.5% -15.6% -18.6% -21.8% -33.0%
1995 23.7% 14.7% 0.6% -9.0% -15.3% -18.6% -23.0% -33.8%
1996 21.2% 14.7% 0.3% -8.9% -14.9% -18.8% -23.0% -33.9%
1997 17.7% 13.2% -0.1% -9.0% -15.1% -19.0% -23.1% -32.9%
1998 18.1% 13.2% 0.2% -9.6% -15.8% -19.1% -23.5% -31.6%
1999 18.4% 11.8% -0.3% -10.3% -16.8% -20.4% -24.7% -31.9%
2000 19.7% 11.3% 0.1% -10.0% -16.4% -20.1% -24.4% -31.5%
2001 24.3% 14.9% 2.8% -7.8% -15.2% -18.9% -22.9% -31.2%
2002 24.1% 17.2% 5.3% -5.2% -13.7% -17.9% -22.3% -30.9%
2003 26.9% 19.3% 7.5% -4.5% -13.1% -16.8% -21.4% -29.5%
2004 27.0% 17.8% 6.9% -4.5% -12.9% -17.2% -22.0% -29.2%
2005 25.7% 18.8% 5.8% -5.3% -13.0% -17.0% -22.5% -29.5%
2006 23.5% 17.1% 6.3% -4.8% -12.8% -16.8% -22.3% -29.2%
2007 23.2% 15.2% 5.1% -4.3% -11.9% -16.2% -21.8% -27.6%
2008 29.6% 20.9% 10.3% -1.5% -10.3% -15.2% -20.7% -27.2%
2009 34.5% 25.2% 13.9% 2.0% -7.6% -13.0% -19.1% -27.6%
2010 34.1% 25.7% 14.6% 2.7% -8.4% -13.7% -20.3% -28.3%
2011 34.7% 26.2% 15.1% 1.7% -8.6% -14.1% -20.3% -28.1%
2012 36.3% 25.3% 14.9% 1.6% -8.8% -13.9% -20.9% -27.9%
2013 32.7% 23.6% 12.4% -0.5% -10.0% -15.3% -22.2% -32.6%
2014 35.9% 25.5% 12.6% -0.8% -10.0% -15.7% -22.4% -32.6%
2015 38.3% 26.1% 11.8% -0.7% -10.0% -16.0% -22.5% -32.3%
2016 38.3% 25.2% 12.7% 0.1% -10.2% -15.6% -22.3% -32.1%
2017 40.3% 26.2% 11.9% -0.7% -10.7% -16.0% -22.3% -30.7%
2018 42.7% 27.5% 12.4% -0.5% -9.8% -14.6% -20.3% -29.1%

Notes: The overall transfer rate is the share by which pre-tax-and-transfer income is raised or lowered by taxes and transfers. It is calculated by dividing what a household receives in government benefits and tax credits minus any tax payments by pre-fiscal income (income before taxes and benefits). Although transfer rates are calculated as a share of pre-fiscal income, we rank households by post-fiscal income.  

Extended notes: We subtract the total federal tax rate from the sum of the total means-tested transfer rate and the share of social insurance benefits in order to obtain the overall transfer rate for each household income group. Total means-tested transfers include Medicaid and the Children’s Health Insurance Program (CHIP), the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), and other transfers. Social insurance benefits include Social Security benefits, Medicare benefits, unemployment insurance, and workers’ compensation. Federal taxes incorporate individual income taxes, payroll taxes, corporate income taxes, and excise taxes. Rates are calculated as a share of pre-fiscal income (technically, market income plus non-means-tested social insurance benefits in keeping with the CBO’s dataset). We rank households by post-fiscal income (income after taxes, tax credits, and transfers).

Source: Congressional Budget Office household income data (CBO 2021). 

View the underlying data on epi.org.