Marginal and Average Income Tax Rates By Age

Marginal and Average Income Tax Rates by Age

Age (lower bound)	Marginal Rate (All $ amounts)	Marginal Rate (Wages)	Marginal Rate (Int&Div)	Average Rate	Returns (thousands)	AGI (thousands)	Income Tax (thousands)
15	13.7	13.5	13.8	2.2	1455.	8642.	186.
20	18.5	18.3	20.4	7.1	7364.	111679.	7983.
25	22.3	22.0	25.6	11.6	11085.	309812.	35972.
30	24.7	24.5	27.2	13.7	12673.	480000.	65702.
35	26.1	25.8	30.1	15.2	13063.	596387.	90720.
40	26.8	26.6	29.5	16.0	12438.	614411.	98332.
45	27.5	27.3	30.2	17.2	11109.	598516.	103125.
50	27.4	27.2	29.4	17.6	7972.	409763.	71936.
55	27.1	27.0	29.2	17.6	6875.	323985.	57000.
60	26.5	26.7	27.1	17.1	5995.	227583.	38977.
65	26.3	27.4	26.3	16.1	6407.	155501.	25100.
70	23.7	26.3	23.7	13.6	5760.	96908.	13200.
75	21.7	25.4	21.9	11.9	4573.	55620.	6632.
80	21.2	22.2	21.0	12.3	3103.	28523.	3510.
85	21.0	26.6	19.9	12.3	1503.	13211.	1621.
90	18.2	13.5	17.9	11.2	595.	4041.	452.
Total:	25.5	25.4	26.5	15.2	124887.	4237026.	643432.

Notes:

The marginal rate shown for all $ amounts is the average marginal rate calculated from a one percent change in all income items and personal itemized deductions.
The marginal rate for Wages is based on an additional percent of wage income.
The CPS is not an ideal source of property income data.
The average rate is just the ratio of tax liability to AGI.
Sample sizes at higher ages are small.
Many low income non-filers are included, usually with a zero tax rate, hence the excess number of returns.
Negative rates may come from the Earned Income Credit.
All taxpayers are given only the standard deduction.
Without itemized deductions, tax is overstated.

Source: The calculation is based on Current Population Survey of the US Census for March 1996 (1995 levels) and the NBER TAXSIM model.

For more information about TAXSIM, see "An Introduction to the TAXSIM Model", by Daniel Feenberg and Elisabeth Coutts. In the Journal of Policy Analysis and Management Vol. 12 No. 1 (Winter, 1993). A PDF version of that paper is available on the TAXSIM web site.

The most recent copy of this table is kept at http://www.nber.org/taxsim.

Daniel Feenberg
25 November 2000.