Research Report Variation in Effective Tax Rates
Katherine Lim, Jeffrey Rohaly
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The expansion of refundable tax credits and the proliferation of specialized tax breaks means that households with similar incomes can face wildly different effective federal tax rates. For example, among middle-income households, the median effective income tax rate is 3 percent, but 10 percent of those households face effective rates exceeding 9 percent and another 10 percent receive a net government subsidy greater than 4 percent of their cash income.
Research Areas Economic mobility and inequality Taxes and budgets
Tags Fiscal policy Individual taxes Federal budget and economy Income and wealth distribution
Policy Centers Urban-Brookings Tax Policy Center