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A history of tax burdens in the U.S.

IRS tax forms

Bob Moon: Like you really need to hear this one again: It's Tax Day -- and if you're still scrambling, you have until midnight to get right with Uncle Sam or file for an extension. Apropos of this community exercise, we started wondering about tax rates. There are no shortages of stories about the super rich paying next to nothing for taxes, but has the burden eased for the rest of us?

To answer some of our tax-rate questions, we've called upon Joseph Thorndike. He's director of the nonprofit and non-partisan Tax Analysts. Joseph, good to have you with us.

Joseph Thorndike: It's great to be here.

Moon: When we talk about the tax burden, most people, I think, point to the policies enacted under former President Ronald Reagan as the reason that it's been easing over the years. Does he deserve all the credit?

Thorndike: He deserves a good share of the credit. Although, it's a long-term process in which most of us have seen our taxes drop a least a little bit. But you know the big numbers sort of obscure some of the important smaller numbers. They've dropped quite a bit more for some groups than they have for others.

Moon: Now there are no shortages of stories out there about the super rich paying next to nothing, but you're suggesting that across all brackets?

Thorndike: Well there's been, I think it might be fair to say, a modest decline across all brackets. But there's been a particularly big decline for both ends of the spectrum: for very low-income taxpayers and for very rich taxpayers. For those at the bottom of the income spectrum, they've done pretty well. The bottom quintile taxpayers payed an average rate of 8 percent in 1979, and that dropped to 4 percent in 2007, which is the latest year I have numbers for. But for the rich, they've also done quite well: the top 1 percent had been paying at 37 percent in 1979, and their rate dropped to 29.5. You can even get more granular than that if you look at the top 400 households: their rate from 26.4 percent in '92 -- this is a somewhat later number -- to 16.6 percent just recently.

Moon: And what about the Bush tax cuts? What were their impact?

Thorndike: Well the Bush tax cuts were good to most of us, especially those of us with kids or really almost everyone. So for some people, the decline starts earlier in say, the Reagan years, but there's a big anti-deficit push in the 1990s that begins to nudge rates back up and they don't start down again until the first Bush administration.

Moon: Now what about the tax on the super rich? I've heard that that was up to around 90 percent during the Eisenhower years.

Thorndike: It was over 90 percent during the Eisenhower years, even higher than that during World War II. And actually, those very high wartime rates stuck around for all of the '50s and into the '60s. They start down in the '60s, but only into the 70 percent, and then they keep coming down. So at the very top, the rates were very high, and they've gradually come down quite a long way.

Moon: Now I think it's fit to say that there's a reluctance on Capitol Hill to tax the super rich. The politics have changed, maybe on both sides. But in the Republican Party, commitment to low taxes among them, how is that working out?

Thorndike: I think the Republican Party today is quite a different party than it was in, say, the 1970s or even the 1980s. There is a real commitment to limiting taxes and to tax rate reductions, and perhaps less of a commitment to deficit reduction. It used to be that Republicans, who have always been suitably enthusiastic about reducing tax rates, were more afraid of unchecked red ink. I mean, that fear may be returning now, but I think for the last 20 years or so, we've seen a politics where deficit worries just did not quite to the level of importance that rate cuts did.

Moon: But the bottom line on this Tax Day is that we can all take at least some consolation in the idea that we're paying a little less than we have been?

Thorndike: A little less than we had been, and probably quite a bit less than we're going to be.

Moon: Joseph Thorndike is director of the Tax History Project at Tax Analysts. Thank you for joining us.

Thorndike: Thank you.

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