US Federal Average Marginal Inc Tax Rates

US Federal Average Marginal Income Tax Rates


in the NBER TAXSIM model
Year Wages Interest
Received 		Dividends LT Gain Mortage
Interest
Paid 		Pensions
1960   21.86  na   41.64    18.99  na na
1961 na na na na na na
1962   22.11    25.55    42.03    17.53  na na
1963 na na na na na na
1964   20.52    23.18    39.37    17.43    -20.08  na
1965 na na na na na na
1966   20.11    22.39    37.09    17.73    -19.74  na
1967   20.46    22.61    37.86    17.81  na na
1968   22.89    25.76    40.94    20.27    -22.80  na
1969   23.90    26.88    41.34    20.92  na na
1970   22.89    25.99    38.52    18.08    -22.37  na
1971   22.01    25.07    37.16    17.98  na na
1972   22.46    25.43    36.87    17.86    -22.50  na
1973   23.33    26.58    38.00    17.89    -23.43  na
1974   24.17    27.53    39.31    18.17  na   21.35 
1975   24.86    26.62    39.03    17.35    -24.73    21.97 
1976   25.71    27.52    41.12    18.24    -25.72    24.70 
1977   26.73    27.87    41.23    20.00    -27.62    22.81 
1978   28.09    29.06    42.61    19.57    -28.50    23.88 
1979   28.22    29.74    43.04    18.34    -28.23    24.03 
1980   29.78    31.42    43.01    17.38    -29.12    26.15 
1981   30.90    32.15    41.33    18.86    -29.99    27.54 
1982   28.86    28.69    35.44    19.18    -27.14    25.89 
1983   26.96    26.22    34.04    16.88    -24.83    23.77 
1984   26.39    26.56    32.86    17.38    -24.36    24.18 
1985   26.59    26.71    32.74    17.35    -24.99    24.10 
1986   26.74    25.62    30.95    17.97    -24.82    23.73 
1987   23.92    23.16    27.35    24.52    -23.08  na
1988   22.47    22.10    24.91    25.51    -22.36    22.80 
1989   22.55    22.72    25.04    25.08    -22.44    22.31 
1990   22.58    23.55    25.15    24.95    -22.26    22.52 
1991   22.55    22.63    25.50    23.89    -21.80    22.22 
1992   22.55    22.11    25.28    24.33    -21.63    22.43 
1993   23.32    23.56    27.10    25.79    -22.41    22.87 
1994   23.61    24.33    27.41    26.11    -22.71    24.02 
1995   23.90    25.23    27.85    26.56    -22.77    24.48 
1996   24.04    25.09    28.02    26.58    -23.08    25.33 
1997   24.46    25.93    28.84    20.34    -23.23    26.08 
1998   24.72    26.09    28.75    19.82    -23.26    26.53 
1999   25.07    26.47    29.04    19.80    -23.42    27.03 
2000   24.99    26.22    28.83    18.53    -23.15    26.82 
2001   24.06    25.09    27.90    18.36    -22.32    25.65 
2002   24.00    24.99    27.69    18.45    -22.49    25.59 
2003   22.08    22.51    18.12    14.43    -20.06    23.04 
2004   23.03    23.14    18.29    14.39    -20.47    24.18 
2005   23.63    23.55    18.57    14.50    -21.92    24.60 
2006   23.84    23.64    18.60    14.47    -22.25    24.70 
2007   24.13    23.83    18.65    14.49    -22.91    24.88 
2008   24.42    23.96    18.67    14.46    -23.74    25.13 
2009   24.83    24.57    26.61    14.39    -24.22    25.82 
2010   25.19    24.70    26.61    14.37    -25.06    26.12 

Source: https://www.nber.org/taxsim/mrates

Notes:

These are dollar weighted average marginal income tax rates for the US Individual Income Tax as calculated by the NBER TAXSIM model from micro data.

They are found by first calculating the tax liability of each return, then increasing (in turn) each income type by 1% and recalculating the tax liability under the assumption that other incomes and expenses are constant. The difference in aggregate tax divided by the difference in aggregate income is the marginal tax rate on the average dollar of that income type. For some individuals with low or negative AGI the measured marginal rate may be zero even for a large income on a particular item. Taxpayers with no income from a particular source do not affect the marginal rate calculation for that source.

The rates take account of most features of the tax code including the maximum tax, minimum tax, alternative taxes, partial inclusion of social security, earned income credit, phaseouts of the standard deduction and lowest bracket rate, etc. After 2003, the EGTRRA and JGTRRA are assumed to remain in effect, including scheduled changes.

For years when any income item is not broken out in the data the tax rate is shown as ``na''. The subsidy for mortgage interest deductions is shown as a negative tax.

Differences in marginal rates reflect both differences in the tax treatment of different types of income and differences in the functional distribution of income. These ``dollar weighted'' marginal rates are typically higher than ``person weighted'' tax rates would be, but may be more appropriate for forecasting changes in income or revenue.

The micro data are from the Individual Income Tax Models available from the Statistics of Income Division of the Internal Revenue Service. Sample sizes range from 80,000 to 200,000 actual tax returns, with weighted oversampling of high income returns. There was no Tax Model in 1961, 1963 or 1965.

2000 - 2010 data are aged from the 1999 Tax Model, as these years are not available from SOI as of this writing. An inflation rate of 2.5% and a real growth rate of 2.2% are assumed, except for no growth from 2000 to 2001 and a 10% decline in all dollar amounts from 2001 to 2002. Long term capital gains are assumed to be 5.6% of AGI. This roughly matches CBO "projections" and "forecasts".

Please cite as Feenberg, Daniel, and Elizabeth Coutts,''An Introduction to the Taxsim Model'' Journal of Policy Analysis and Management Vol 12, Number 1, Winter 1993, and this web site (https://www.nber.org/taxsim).

Suggestions and comments are welcome. If you use these data in a paper please send me a copy.

Daniel Feenberg
National Bureau of Economic Research
1050 Mass Ave
Cambridge MA 02138
617-588-0343
feenberg@nber.org

NBER home page Last revision date 17 July 2003.