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Income Tax Revenues (% of GDP)
12
10
8
6
4
2
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
Household Tax Revenue
Corporate Income Taxes
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Tax Revenues by Country
Mexico
Turkey
Korea
United States
Ireland
Japan
Slovak Republic
Switzerland
Australia
Greece
Canada
Spain
New Zealand
Poland
United Kingdom
OECD Total
Iceland
Germany
Portugal
Czech Republic
Netherlands
Luxembourg
Hungary
Norway
Finland
Austria
France
Italy
Belgium
Sweden
Denmark
0
10
20
30
40
50
60
Percent of GDP
;W]ZKM"7-+,<I`,I\IJI[M<IJTM7
Marginal Tax Rate, Highest Tax Bracket
100
90
80
70
60
50
40
30
20
10
2002
2004
2006
1994
1996
1998
2000
1986
1988
1990
1992
1974
1975
1978
1980
1982
1984
1962
1964
1966
1968
1970
1972
1960
0
;W]ZKM"<I`8WTQKa+MV\MZ<I`.IK\["0Q[\WZQKIT1VLQ^QL]IT1VKWUM<I`8IZIUM\MZ[7K\!!
Effective Federal Income Tax Rate
35
Tax Rate, Percent
30
25
20
15
Households With Gross Income Over $1 million
Top 400 Households
10
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
;W]ZKM"+MV\MZWV*]LOM\IVL8WTQKa8ZQWZQ\QM[+*88
Effective Total Federal Tax Rate
40
35
Tax Rate, Percent
30
25
Lowest Quintile
Middle Quintile
20
Highest Quintile
15
Highest 1%
10
5
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
0
;W]ZKM"<I`8WTQKa+MV\MZ
?MIT\P<I`ML4M[[<PIV?WZS
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)UMZQKIV[XIa[QOVQÅKIV\TaTW_MZ\I`M[\PIV\PMa][ML\W1VZMITQ\aK]\[\W\PMKIXQ\ITOIQV[\I`ZI\M
_MZMXZQUIZQTaZM[XWV[QJTMNWZ\PM[\MILQTaNITTQVO\I`[PIZMWN \PMZQKP+IXQ\ITOIQV[WZXZWÅ\[MIZVML
NZWU\PM[ITMWN QV^M[\UMV\[QVKIXQ\IT[]KPI[[\WKS[JWVL[WZZMITM[\I\MIZM\PMUMIV[Ja_PQKPUIVa
Effective Social Insurance Tax Rate
12
Tax Rate, Percent
10
8
Lowest Quintile
Middle Quintile
6
Highest Quintile
4
Highest 5%
Highest 1%
2
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
0
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Benefits from Income Tax Breaks, by Income Quintile
Percent Increase in After-Tax Income
2.5
2
1.5
1
0.5
0
Charitable
Contributions
Lowest Quintile
State and
Local Taxes
Second Quintile
Interest Paid
on a Home
Mortage
Capital Gains Contributions
Employer
and Earnings Contributions
for Retirement for Health
Plans
Care
Middle Quintile
Fourth Quintile
Highest Quintile
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Costs of Selected Tax Breaks 2007
Capital Gains
$162
Contributions and Earnings for
Retirement Plans
$146
Employer Contributions for Health
Care
$137
$89
Interest Paid on a Home Mortgage
$38
Charitable Contributions
$34
State and Local Taxes
0
50
100
150
200
Billions of Dollars
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Revenue Source
How Does it Work?
How Much Will It Generate?
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I[\PMQV\MZVM\OZQLJZQLOM[
A small tax on all financial
transactions. The amount of
M\K_MVW\WVTa[\QU]TI\M
the tax would vary by type
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of transaction, but would be
Financial Transactions
no more than 0.50 percent
JaKZMI\QVOVM_RWJ[J]\_M
Up to $177 billion per year20
per transaction. The tax
Tax
MV[]ZMQ\[TWVO\MZUPMIT\P
would apply to trades of
stocks, bonds, derivatives,
JaJ]QTLQVO\PMNW]VLI\QWV
currency, and other financial
VMMLMLNWZIXZW[XMZW][[\
instruments.
KMV\]ZaMKWVWUa1V^M[\QVOQV
Charge a 5.4% surcharge on
\PMN]\]ZMQ[\PMWVTa_Ia\W
income for joint filers with AGI
18Surcharge on Top
$31 billion a year immediately,
above $1,000,000 (assumes
MV[]ZM\PMTWVO\MZU[\IJQTQ\a
the Bush tax cuts expire,
Earners
$53 billion a year by 201521.
WN \PMMKWVWUa
so the top marginal rate
becomes 45%).
Progressive Estate Tax
Implement graduated tax
rates for estates valued at over
$3.5 million for an individual.
Estates would be taxed at
a 45% marginal up to $10
million, 50% up to $50 million,
55% on up to $500 million,
and 65% on estates worth
over $500 million.
$15 billion per year
immediately,
$319 billion over the next
decade 22
Eliminate Capital
Gains and Dividends
Tax Preference
Tax capital gains and qualified
dividends at the same rate as
wage income (as was done
after the 1986 Tax Reforms)
$78 billion in 2011, falling
slightly to $71 billion a year by
201523.
Impose a Financial
Crisis Responsibility
Fee
Asses a fee on financial
institutions with over $50
billion in assets (roughly 60
institutions) equal to fifteen
basis points (0.15%) of a
financial institution’s covered
liabilities
$9 billion per year
Reform International
Tax System
Eliminate deferred taxation
on foreign source income,
reform the foreign tax credit,
limit income shifting, and
other reforms proposed in the
president’s budget request.
Approximately $45 billion a
year.
Eliminating or revising the most
inefficient and inequitable
tax expenditures, including
tax deductions for mortgage
interest and contributions
to retirement and education
savings accounts.
Replace the mortgage interest
deduction with a tax credit:
$50 billion24 a year by 2014.
Eliminate exclusion for employee
contributions to retirement
savings accounts: $110 billion in
2009, $170 billion by 201525
Reforming Tax
Expenditures
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40
8
35
6
Tax rate, percent
30
4
25
20
2
15
0
10
-2
5
0
GDP Growth, Percent
Effective Total Federal Tax Rate
-4
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
Lowest Quintile
Middle Quintile
Highest 1%
GDP growth (annual %)
Highest Quintile
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