Tomorrow (October 22nd) marks the 25th anniversary of the enactment of the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Reform Act of 1986 which dramatically simplified the tax code while lowering tax rates for individuals and corporations.
Tax reform is once again the hot topic in Washington so I thought it would be interesting to see how some of the major tax, budget, and economic indicators today compare to the conditions in 1986.
|
Topic |
1986 |
2011 |
|
President |
Ronald Reagan (R ) |
Barack Obama (D) |
|
Chairman of the Ways and Means Committee |
Dan Rostenkowski (D-IL) |
David Camp (R-MI) |
|
Chairman of the Finance Committee |
Robert Packwood (R-OR) |
Max Baucus (D-MT) |
|
Top corporate tax rate |
46% |
35% |
|
Top individual tax rate |
50% |
35% |
|
Income threshold for paying top rate (in 2011 dollars) |
$358,782 |
$379,150 |
|
Share of income earned by the top 1% of filers |
11.3% |
16.9% |
|
Share of taxes paid by the top 1% of filers |
25.8% |
36.7% |
|
Average tax rate of the top 1% of filers |
33.1% |
24.0% |
|
Share of income earned by the bottom 50% of filers |
16.7% |
13.5% |
|
Share of taxes paid by the bottom 50% of filers |
6.5% |
2.3% |
|
Average tax rate of the bottom 50% of filers |
5.6% |
1.8% |
|
Number of tax brackets |
15 |
6 |
|
Number of income tax filers |
103,045,170 |
140,494,127 |
|
Number of filers with no income tax liability |
19,077,757 |
58,603,938 |
|
Percent of filers with no income tax liability |
18.5% |
41.7% |
|
Deficit as a percent of GDP |
5.0% |
8.7% |
|
Deficit in billions of 2011 dollars |
-$420 |
-$1,299 |
|
Federal Outlays as a percent of GDP |
22.5% |
24.1% |
|
Federal Outlays in billions of 2011 dollars |
$1,880 |
$3,601 |
|
Federal revenues as a percent of GDP |
17.5% |
15.4% |
|
Federal revenues in 2011 dollars |
$1,460 |
$2,302 |
|
Real GDP growth (2nd Quarter) |
1.6% |
1.3% |
|
Unemployment rate (September) |
7.0% |
9.1% |