Average marginal tax rates revisited

Abstract

I revise and update through 1994 the estimated average marginal income and Social Security tax rates of Seater (1982) [Marginal federal personal and corporate income tax rates in the US, 1909–1975. Journal of Monetary Economics, 10, 361–381], Seater (1985) [On the construction of marginal federal personal and social security tax rates in the US. Journal of Monetary Economics, 15, 121–135] and Barro and Sahasakul (1983) [Measuring the average marginal tax rate from the individual income tax. Journal of Business, 56, 419–452] and Barro and Sahasakul (1986) [Average marginal tax rates on social security and the individual income tax. Journal of Business, 59, 555–566], and I introduce a return-weighted Social Security tax rate. Since 1981, the average marginal effective income tax rate has declined from about 16% to 12%; however, the combined federal tax burden remains high by historic standards because the average marginal Social Security tax rate has increased from about 5% to about 6.5%.