Planning for Life

Tax Facts for Tax Day

Posted by Harry S. Margolis on April 13, 2012

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By Harry S. Margolis

With our income taxes due in a few days (except for those of us who always file on extension), a few tax facts are in order.  These are courtesy of Citizens for Tax Justice and the Institute on Taxation & Economic Policy, both in Washington, DC: 

  • The United States is one of the least taxed developed countries in the world as a percentage of gross domestic product, the measure of the nation's total economic output.  Our taxes are a bit over 20% of GDP.  Denmark tops the list at almost 50%.  France pays a bit more than 40%, Germany about 35% and Switzerland about 30%.  These figures are provided by the Organization for Economic Cooperation and Development.

  • On average, Americans pay 28% of their income on local, state and federal taxes.  The top quintile (20%) pays about 30% of their income and the bottom quintile pays about 17% of their income in taxes.  The quintiles break out as follows:

Lowest 20%        17.4%

Second 20%        21.2%

Middle 20%          25.2%

Fourth 20%         28.3%

Next 10%            29.5%

Next 4%             30.4%

Top 1%              29.0%

It's somewhat progressive, but could be more so.  And of course, we know that the tax code could and should be a lot simpler, perhaps the one thing conservatives and liberals agree on.  If only they could agree on how to do it!

Topics: income taxes, Estate Planning

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