Senate Finance Committee Chairman Max Baucus has released a detailed proposal for international corporate tax reform, which we summarized earlier this week. While there are some improvements to current law, the proposal...
- Income Tax Payment of Top 1% of Filers Exceeds that of Bottom 95%
Income Tax Payment of Top 1% of Filers Exceeds that of Bottom 95%
New IRS Data: Top Earners Made the Most Ever and Paid the Most Ever
Washington, DC - The top 1 percent of tax filers earned about 22.8 percent of the nation's income in 2007 (the latest IRS data available), and paid 40.4 percent of all federal income taxes - more than the bottom 95 percent of tax filers combined, according to a Tax Foundation analysis of just-released IRS data.
Both income and income tax shares for the top 1 percent of tax returns (AGI over $410,096) hit all-time highs in 2007. In Fiscal Fact No. 183, "Summary of Latest Federal Individual Income Tax Data," Tax Foundation Senior Economist Gerald Prante notes that the record-setting trend for income and income tax shares is likely to end with 2007, given the economic downturn in 2008.
"This pattern at the top of the income spectrum is the same during almost every recession and recovery," according to Prante. "Unlike middle-income wage-earners whose incomes and tax liabilities are fairly steady, high-income people have incomes and tax liabilities that fluctuate wildly with the economy. The sharp rise in federal government tax revenue from 2003 to 2007 is likely to be followed by a substantial dip in 2008, 2009 and perhaps 2010 as the economy struggles through the worst recession since the early 1980s."
Fiscal Fact No. 183, available online at http://www.taxfoundation.org/legacy/show/250.html, also takes a look for the first time at the top 0.1 percent of tax returns (the top 10 percent of the top 1 percent), which amounts to only 141,000 tax returns, but accounts for nearly 12 percent of AGI earned and around 20 percent of the nation's federal individual income taxes.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
Fiscal Fact No. 183 is available online at http://www.taxfoundation.org. Summary tables of federal individual income tax data from 1980-2007 is available here: http://www.taxfoundation.org/legacy/show/23408.html. To schedule an interview, please contact Natasha Altamirano, the Tax Foundation's Manager of Media Relations, at (202) 464-5102 or firstname.lastname@example.org.
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