The Current State of Taxation in the US

Four years ago the CBO published a report outlining the effective tax rates for Americans under the current tax laws at that time.

CBO estimated the effective rates for four federal taxes--individual and corporate income taxes, payroll taxes, and excise taxes--under current law for each year from 2001 through 2014.

The rates reflect the three tax cuts of 2001-2003, which are set to expire by 2011 starting next year.

• The report shows the effective tax rate for 2009 to be: 22% (and almost 32% for some)


• Without the tax cuts the rate for 2009 would have been: 23.3%

A reduction of less than 1.3% spurred much of the economic growth between 2001 and 2008. And tax revenue went from $2 trillion in 2003 to over $2.5 trillion in 2007 — a 25% increase!

The report only includes four federal taxes, so if you include all of the other federal taxation and then throw in the taxes at the state and local levels we find an even bleaker picture.

Share of revenue by federal, state, and local governments. Total tax revenue at all levels for 2009 is $4.6 trillion or around 32% of GDP. This amount will vary for people depending on income and location between -5% and over 50%. But the bottom line is our governments are creating a "burden which is grievous to be borne!"