Who pays the taxes?

Personal & Corporate taxes, 1959 to 2012

With all this talk about the fiscal cliff, automatic spending cuts and, of course, tax hikes, I thought I’d start to look at the issue by means of the data. I’ve been digging into the revenue side a lot this week, so the chart above shows two series: Personal current taxes (W055RC1, green bars) and Tax Receipts on Corporate Income paid to the Federal Government (FCTAX, black bars). Simply calculating the ratio of taxes paid by corporations compared to personal income taxes there appears to be a disparity (and of course leaving issues such as globalisation, the size of the US population, etc aside)

Specifically, at the earliest year data is available the ratio of taxes corporations paid compared to that paid by individuals was 53%, while the most recent data shows this ratio had dropped to roughly 21%. More interestingly I’ve calculated the average year by year and broken it down by decades. During the 60′s (period ending 1969) the ratio of revenue paid by corporations compared to individuals was roughly 45%, dropping to 31% in the 70s and the roughly 20% in the 80s where it remains to this day. In other words while the tax burden on corporations has dropped significantly for individuals it has soared.

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