Unexpectedly Intriguing!
August 27, 2007

Some things just demand a picture to illustrate. The Tax Foundation's recent computation of the change in progressivity of U.S. income taxes from 2000 to 2005 is one of them:

How the Progressivity of U.S. Income Taxes Changed from 2000 to 2005

The data presented in the chart above includes the contributions of the refundable portions of the Earned Income Tax Credit and the Additional Child Tax Credit. These factors, along with lower tax rates, are a large reason why the tax share decreased substantially for those making less than $25,000 in 2005, as the average tax share for those at these adjusted gross incomes moved to where they receive substantially more in tax credits than they pay in income taxes.

We'll observe that our estimate of the poverty threshold for a married couple with two children in 2005 is $19,723, less than the crossover to positive taxation levels of just over $25,000 for that year.

The chart visually confirms Gerald Prante's observation "that the amount of progressivity within the federal individual income tax system increased from 2000 to 2005, even though income inequality increased slightly."

On that count, slightly is correct. The Gini coefficient, perhaps the best measure of income inequality within a nation, rose by 0.007 for the United States between 2000 and 2005, from 0.462 to 0.469. By contrast, in the decade of the 1990s, it rose from a level of 0.428 in 1990 to 0.462 in 2000, marking a significant increase in income inequality within the U.S. for those years.

Labels: , ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.