Summary of Latest Federal Individual Income Tax Data

 
 
October 24, 2011

2013's report on data from calender year 2011 is available here.

2012's report on data from calender year 2010 is available here.

Tax Foundation Fiscal Fact No. 285

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Summary of Federal Individual Income Tax Data
Number of Federal Individual Income Tax Returns Filed, 1980-2009
Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980-2009
Total Income Tax after Credits, 1980-2009
Adjusted Gross Income Shares, 1980-2009
Total Income Tax Shares, 1980-2009
Dollar Cut-Off, 1980-2009
Average Tax Rate, 1980-2009

The Internal Revenue Service has released new data on individual income taxes, reporting on calendar year 2009.  The year saw no economic improvement from 2008 as unemployment continued to increase.

The amount of individual income tax paid steeply declined by $166 billion, twice the decline from 2007 to 2008.  Nationally, average effective income tax rates were at their lowest levels since the IRS began tracking them in 1986. The average tax rate for returns with a positive liability went from 12.24 percent in 2008 to 11.06 percent in 2009.

As the data below show, incomes reported by tax returns at the high end of the income spectrum fell from 2008 to 2009, as did their share of the nation's income and income taxes paid. In 2009, the top 1 percent of tax returns paid 36.7 percent of all federal individual income taxes and earned 16.9 percent of adjusted gross income (AGI), compared to 2008 when those figures were 38.0 percent and 20.0 percent, respectively. Both of those figures-share of income and share of taxes paid-were their lowest since 2003 when the top 1 percent earned 16.7 percent of adjusted gross income and paid 34.3 percent of federal individual income taxes.

Each year from 2005 to 2007, the top 1 percent's constantly growing share of income earned and taxes paid set a record. The 2008 reversal of this trend continued in 2009. In fact, the income share for the top 1 percent of tax returns was lower in 2009 than in 2000, largely due to differences in capital gains.

Another indicator of this reversal in the income and tax shares of the top 1 percent is that, as in 2008, the top 1 percent no longer pays a larger percentage of total income tax than the bottom 95 percent. This trend was exacerbated by the aforementioned precipitous drop in AGI in 2009.  During 2009, the bottom 95 percent (AGI under $154,643) paid 41.3 percent of the total collected, a larger share than the 36.7 percent paid by the top 1 percent (AGI over $343,947).

The top-earning 5 percent of taxpayers (AGI equal to or greater than $154,643), however, still paid far more than the bottom 95 percent. The top 5 percent earned 31.7 percent of the nation's adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.

Since 2001, the IRS has also been presenting data on a small subset of the top 1 percent, the top 0.1 percent (the top 10 percent of the top 1 percent). In 2009, this top 0.1 percent filed 137,982 tax returns, reporting 7.8 percent of all adjusted gross income earned and paying approximately 17.1 percent of the nation's federal individual income taxes. The average income for a tax return in the top 0.1 percent was $4.4 million in 2009, while the average amount of income tax paid was $1.07 million, indicating an average effective individual income tax rate of 24.3 percent. It is worth noting that while the average income of a taxpayer in the top 0.1 percent declined in 2009, the effective tax rate for this group actually rose from 2008 to 2009.  This counterintuitive result is explained by the diminished capital gains and dividend income on high-income tax returns, income sources that are taxed at lower rates. With their 2009 income more dominated by ordinary income taxed at higher rates, their average rate on high-income consequently rose.

[Note: This very top income group actually has a lower average effective income tax rate than the rest of the top 1 percent of returns because these extremely high-income returns are more likely to have income from capital gains and dividends, which are typically taxed at lower rates. It's worth pointing out that in the case of capital gains and dividends, income derived from these sources has already been taxed once by the corporate income tax, which is not included here, meaning the average effective tax rate numbers can be somewhat misleading.]

Overall, these data on high-income tax returns appear to confirm that the continued economic stagnation had the same diminishing effect on income inequality that most recessions have, and that it occurred for the same reason: a sharp decline in income at the high end. This appears to contradict reports based upon Census data suggesting the opposite[1] that the recession increased income inequality. This inconsistency between IRS data and Census data is explained by a number of factors such as: (1) Census doesn't break down data for the extremely high-income tax returns (it typically stops at the 5 percent threshold), (2) Census income measures do not account for capital gains realizations, and (3) Census data gathered from household surveys are less reliable for income information at the high end of the income spectrum than IRS data.

The IRS data below include all of the 137.98 million tax returns filed in 2009 that had a positive AGI, not just the returns from people who earned enough to owe taxes. These figures exclude those tax returns filing a return merely to receive a stimulus check.

From other IRS data, we can see that in 2009, around 59 million tax returns were filed with either positive or negative AGI that used exemptions, deductions and tax credits to completely wipe out their federal income tax liability. Not only did they get back every dollar that the federal government withheld from their paychecks during 2009, but some even received more money back from the IRS. This is a result of refundable tax credits like the earned income tax credit (EITC), the refundable portion of which is not included in the aggregate percentile data here. (For a detailed paper on the distribution of the entire U.S. fiscal system, including all federal, state and local taxes, read "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991 - 2004."[2]

Including all tax returns that had a positive AGI, taxpayers with an AGI of $159,643 or more in 2009 constituted the nation's top 5 percent of income earners. To break into the top 1 percent, a tax return had to have an AGI of $343,947 or more, which was 10 percent lower than the 2008 threshold of $380,354. The income threshold to break into the top 0.1 percent also fell dramatically from 2008 to 2009, from about $1.8 million in 2008 to $1.4 million in 2009.

Although the 2001 and 2003 tax cuts were across the board (even though certain provisions within those cuts were targeted at various income ranges), the federal individual income tax remains highly progressive. The average tax rate in 2009 ranged from around 1.9 percent of income for the bottom half of tax returns to 24.0 percent for the top 1 percent. With the possible exception of the estate tax, the federal income tax is the most progressive tax in the United States, and these numbers show why.

The source for the following charts is the Internal Revenue Service, http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html ("Individual Income Tax Returns with Positive Adjusted Gross Income (AGI) Returns Classified by Tax Percentile - Early Release").

Table 1
Summary of Federal Income Tax Data, 2009

  

Number of Returns with Positive AGI

AGI ($ millions)

Income Taxes Paid ($ millions)

Group's Share of Total AGI

Group's Share of Income Taxes

Income Split Point

Average Tax Rate

All Taxpayers

137,982,203

$7,825,389

$865,863

100.0%

100.0%

-

11.06%

Top 1%

1,379,822

$1,324,572

$318,043

16.9%

36.7%

 $343,927.00

24.01%

1-5%

5,519,288

$1,157,918

$189,864

14.8%

22.0%

 

16.40%

Top 5%

6,899,110

$2,482,490

$507,907

31.7%

58.7%

 $154,643.00

20.46%

5-10%

6,899,110

$897,241

$102,249

11.5%

11.8%

 

11.40%

Top 10%

13,798,220

$3,379,731

$610,156

43.2%

70.5%

 $112,124.00

18.05%

10-25%

20,697,331

$1,770,140

$145,747

22.6%

17.0%

 

8.23%

Top 25%

34,495,551

$5,149,871

$755,903

65.8%

87.3%

 $ 66,193.00

14.68%

25-50%

34,495,551

$1,620,303

$90,449

20.7%

11.0%

 

5.58%

Top 50%

68,991,102

$6,770,174

$846,352

86.5%

97.7%

 > $32,396

12.50%

Bottom 50%

68,991,102

$1,055,215

$19,511

13.5%

2.3%

 < $32,396

1.85%

Source: Internal Revenue Service

Table 2
Number of Federal Individual Income Tax Returns Filed 1980-2009 (In thousands)

Year

Total

Top 0.1%

Top 1%

Top 5%

Between 5% & 10%

Top 10%

Between 10% & 25%

Top 25%

Between 25% & 50%

Top 50%

Bottom 50%

1980

93,239

 

932

4,662

4,662

9,324

13,986

23,310

23,310

46,619

46,619

1981

94,587

 

946

4,729

4,729

9,459

14,188

23,647

23,647

47,293

47,293

1982

94,426

 

944

4,721

4,721

9,443

14,164

23,607

23,607

47,213

47,213

1983

95,331

 

953

4,767

4,767

9,533

14,300

23,833

23,833

47,665

47,665

1984

98,436

 

984

4,922

4,922

9,844

14,765

24,609

24,609

49,218

49,219

1985

100,625

 

1,006

5,031

5,031

10,063

15,094

25,156

25,156

50,313

50,313

1986

102,088

 

1,021

5,104

5,104

10,209

15,313

25,522

25,522

51,044

51,044

Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable

1987

106,155

 

1,062

5,308

5,308

10,615

15,923

26,539

26,539

53,077

53,077

1988

108,873

 

1,089

5,444

5,444

10,887

16,331

27,218

27,218

54,436

54,436

1989

111,313

 

1,113

5,566

5,566

11,131

16,697

27,828

27,828

55,656

55,656

1990

112,812

 

1,128

5,641

5,641

11,281

16,922

28,203

28,203

56,406

56,406

1991

113,804

 

1,138

5,690

5,690

11,380

17,071

28,451

28,451

56,902

56,902

1992

112,653

 

1,127

5,633

5,633

11,265

16,898

28,163

28,163

56,326

56,326

1993

113,681

 

1,137

5,684

5,684

11,368

17,052

28,420

28,420

56,841

56,841

1994

114,990

 

1,150

5,749

5,749

11,499

17,248

28,747

28,747

57,495

57,495

1995

117,274

 

1,173

5,864

5,864

11,727

17,591

29,319

29,319

58,637

58,637

1996

119,442

 

1,194

5,972

5,972

11,944

17,916

29,860

29,860

59,721

59,721

1997

121,503

 

1,215

6,075

6,075

12,150

18,225

30,376

30,376

60,752

60,752

1998

123,776

 

1,238

6,189

6,189

12,378

18,566

30,944

30,944

61,888

61,888

1999

126,009

 

1,260

6,300

6,300

12,601

18,901

31,502

31,502

63,004

63,004

2000

128,227

 

1,282

6,411

6,411

12,823

19,234

32,057

32,057

64,114

64,114

2001

128,817

129

1,288

6,441

6,441

12,882

19,323

32,204

32,204

64,409

64,409

2002

128,324

128

1,283

6,416

6,416

12,832

19,249

32,081

32,081

64,162

64,162

2003

128,610

129

1,286

6,430

6,430

12,861

19,291

32,152

32,152

64,305

64,305

2004

130,371

130

1,304

6,519

6,519

13,037

19,556

32,593

32,593

65,186

65,186

2005

132,612

133

1,326

6,631

6,631

13,261

19,892

33,153

33,153

66,306

66,306

2006

135,719

136

1,357

6,786

6,786

13,572

20,358

33,930

33,930

67,860

67,860

2007

141,071

141

1,411

7,054

7,054

14,107

21,161

35,268

35,268

70,535

70,535

2008

139,961

140

1,400

6,998

6,998

13,996

20,994

34,990

34,990

69,980

69,980

2009

137,982

138

1,380

6,899

6,899

13,798

20,698

34,496

34,495

68,991

68,991

Source: Internal Revenue Service

Table 3
Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980-2009 ($ Billions)

Year

Total

Top 0.1%

Top 1%

Top 5%

Between 5% & 10%

Top 10%

Between 10% & 25%

Top 25%

Between 25% & 50%

Top 50%

Bottom 50%

1980

$1,627

 

$138

$342

$181

$523

$400

$922

$417

$1,339

$288

1981

$1,791

 

$149

$372

$201

$573

$442

$1,015

$458

$1,473

$318

1982

$1,876

 

$167

$398

$207

$605

$460

$1,065

$478

$1,544

$332

1983

$1,970

 

$183

$428

$217

$646

$481

$1,127

$498

$1,625

$344

1984

$2,173

 

$210

$482

$240

$723

$528

$1,251

$543

$1,794

$379

1985

$2,344

 

$235

$531

$260

$791

$567

$1,359

$580

$1,939

$405

1986

$2,524

 

$285

$608

$278

$887

$604

$1,490

$613

$2,104

$421

Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable

1987

$2,814

 

$347

$722

$316

$1,038

$671

$1,709

$664

$2,374

$440

1988

$3,124

 

$474

$891

$342

$1,233

$718

$1,951

$707

$2,658

$466

1989

$3,299

 

$468

$918

$368

$1,287

$768

$2,054

$751

$2,805

$494

1990

$3,451

 

$483

$953

$385

$1,338

$806

$2,144

$788

$2,933

$519

1991

$3,516

 

$457

$943

$400

$1,343

$832

$2,175

$809

$2,984

$532

1992

$3,681

 

$524

$1,031

$413

$1,444

$856

$2,299

$832

$3,131

$549

1993

$3,776

 

$521

$1,048

$426

$1,474

$883

$2,358

$854

$3,212

$563

1994

$3,961

 

$547

$1,103

$449

$1,552

$929

$2,481

$890

$3,371

$590

1995

$4,245

 

$620

$1,223

$482

$1,705

$985

$2,690

$938

$3,628

$617

1996

$4,591

 

$737

$1,394

$515

$1,909

$1,043

$2,953

$992

$3,944

$646

1997

$5,023

 

$873

$1,597

$554

$2,151

$1,116

$3,268

$1,060

$4,328

$695

1998

$5,469

 

$1,010

$1,797

$597

$2,394

$1,196

$3,590

$1,132

$4,721

$748

1999

$5,909

 

$1,153

$2,012

$641

$2,653

$1,274

$3,927

$1,199

$5,126

$783

2000

$6,424

 

$1,337

$2,267

$688

$2,955

$1,358

$4,314

$1,276

$5,590

$834

2001

$6,241

$506

$1,094

$1,996

$694

$2,691

$1,380

$4,071

$1,308

$5,379

$862

2002

$6,114

$432

$986

$1,868

$686

$2,553

$1,382

$3,936

$1,309

$5,244

$870

2003

$6,288

$476

$1,055

$1,961

$703

$2,663

$1,415

$4,078

$1,330

$5,408

$880

2004

$6,875

$629

$1,306

$2,300

$750

$3,049

$1,497

$4,546

$1,406

$5,953

$922

2005

$7,508

$799

$1,592

$2,684

$803

$3,487

$1,582

$5,069

$1,475

$6,545

$963

2006

$8,122

$911

$1,792

$2,978

$865

$3,843

$1,693

$5,536

$1,570

$7,106

$1,016

2007

$8,799

$1,049

$2,008

$3,295

$933

$4,228

$1,818

$6,045

$1,675

$7,720

$1,078

2008

$8,427

$839

$1,685

$2,927

$930

$3,856

$1,822

$5,678

$1,674

$7,352

$1,075

2009

$7,825

$610

$1,326

$2,482

$898

$3,380

$1,770

$5,150

$1,620

$6,770

$1,055

  Source: Internal Revenue Service

Table 4
Total Income Tax after Credits, 1980-2009 ($ Billions)

Year

Total

Top 0.1%

Top 1%

Top 5%

Between 5% & 10%

Top 10%

Between 10% & 25%

Top 25%

Between 25% & 50%

Top 50%

Bottom 50%

1980

$249

 

$47

$92

$31

$123

$59

$182

$50

$232

$18

1981

$282

 

$50

$99

$36

$135

$69

$204

$57

$261

$21

1982

$276

 

$53

$100

$34

$134

$66

$200

$56

$256

$20

1983

$272

 

$55

$101

$34

$135

$64

$199

$54

$252

$19

1984

$297

 

$63

$113

$37

$150

$68

$219

$57

$276

$22

1985

$322

 

$70

$125

$41

$166

$73

$238

$60

$299

$23

1986

$367

 

$94

$156

$44

$201

$78

$279

$64

$343

$24

Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable

1987

$369

 

$92

$160

$46

$205

$79

$284

$63

$347

$22

1988

$413

 

$114

$188

$48

$236

$85

$321

$68

$389

$24

1989

$433

 

$109

$190

$51

$241

$93

$334

$73

$408

$25

1990

$447

 

$112

$195

$52

$248

$97

$344

$77

$421

$26

1991

$448

 

$111

$194

$56

$250

$96

$347

$77

$424

$25

1992

$476

 

$131

$218

$58

$276

$97

$374

$78

$452

$24

1993

$503

 

$146

$238

$60

$298

$101

$399

$80

$479

$24

1994

$535

 

$154

$254

$64

$318

$108

$425

$84

$509

$25

1995

$588

 

$178

$288

$70

$357

$115

$473

$88

$561

$27

1996

$658

 

$213

$335

$76

$411

$124

$535

$95

$630

$28

1997

$727

 

$241

$377

$82

$460

$134

$594

$102

$696

$31

1998

$788

 

$274

$425

$88

$513

$139

$652

$103

$755

$33

1999

$877

 

$317

$486

$97

$583

$150

$733

$109

$842

$35

2000

$981

 

$367

$554

$106

$660

$164

$824

$118

$942

$38

2001

$888

$143

$301

$473

$103

$576

$160

$736

$117

$853

$35

2002

$797

$123

$269

$429

$95

$524

$145

$669

$100

$769

$28

2003

$748

$117

$256

$407

$86

$492

$135

$627

$95

$722

$26

2004

$832

$145

$307

$475

$92

$567

$139

$706

$99

$804

$27

2005

$935

$180

$368

$558

$99

$657

$147

$804

$102

$906

$29

2006

$1,024

$200

$408

$616

$109

$725

$158

$883

$110

$993

$31

2007

$1,116

$225

$451

$676

$118

$794

$171

$966

$117

$1,083

$32

2008

$1,032

$190

$392

$606

$116

$721

$169

$891

$113

$1,004

$28

2009

$866

$148

$318

$508

$102

$610

$146

$756

$90

$846

$20

  Source: Internal Revenue Service

Table 5
Adjusted Gross Income Shares, 1980-2009 (Percent of total AGI earned by each group)

Year

Total

Top 0.1%

Top 1%

Top 5%

Between 5% & 10%

Top 10%

Between 10% & 25%

Top 25%

Between 25% & 50%

Top 50%

Bottom 50%

1980

100%

 

8.46%

21.01%

11.12%

32.13%

24.57%

56.70%

25.62%

82.32%

17.68%

1981

100%

 

8.30%

20.78%

11.20%

31.98%

24.69%

56.67%

25.59%

82.25%

17.75%

1982

100%

 

8.91%

21.23%

11.03%

32.26%

24.53%

56.79%

25.50%

82.29%

17.71%

1983

100%

 

9.29%

21.74%

11.04%

32.78%

24.44%

57.22%

25.30%

82.52%

17.48%

1984

100%

 

9.66%

22.19%

11.06%

33.25%

24.31%

57.56%

25.00%

82.56%

17.44%

1985

100%

 

10.03%

22.67%

11.10%

33.77%

24.21%

57.97%

24.77%

82.74%

17.26%

1986

100%

 

11.30%

24.11%

11.02%

35.12%

23.92%

59.04%

24.30%

83.34%

16.66%

Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable

1987

100%

 

12.32%

25.67%

11.23%

36.90%

23.85%

60.75%

23.62%

84.37%

15.63%

1988

100%

 

15.16%

28.51%

10.94%

39.45%

22.99%

62.44%

22.63%

85.07%

14.93%

1989

100%

 

14.19%

27.84%

11.16%

39.00%

23.28%

62.28%

22.76%

85.04%

14.96%

1990

100%

 

14.00%

27.62%

11.15%

38.77%

23.36%

62.13%

22.84%

84.97%

15.03%

1991

100%

 

12.99%

26.83%

11.37%

38.20%

23.65%

61.85%

23.01%

84.87%

15.13%

1992

100%

 

14.23%

28.01%

11.21%

39.23%

23.25%

62.47%

22.61%

85.08%

14.92%

1993

100%

 

13.79%

27.76%

11.29%

39.05%

23.40%

62.45%

22.63%

85.08%

14.92%

1994

100%

 

13.80%

27.85%

11.34%

39.19%

23.45%

62.64%

22.48%

85.11%

14.89%

1995

100%

 

14.60%

28.81%

11.35%

40.16%

23.21%

63.37%

22.09%

85.46%

14.54%

1996

100%

 

16.04%

30.36%

11.23%

41.59%

22.73%

64.32%

21.60%

85.92%

14.08%

1997

100%

 

17.38%

31.79%

11.03%

42.83%

22.22%

65.05%

21.11%

86.16%

13.84%

1998

100%

 

18.47%

32.85%

10.92%

43.77%

21.87%

65.63%

20.69%

86.33%

13.67%

1999

100%

 

19.51%

34.04%

10.85%

44.89%

21.57%

66.46%

20.29%

86.75%

13.25%

2000

100%

 

20.81%

35.30%

10.71%

46.01%

21.15%

67.15%

19.86%

87.01%

12.99%

2001

100%

8.10%

17.53%

31.99%

11.12%

43.11%

22.12%

65.23%

20.96%

86.19%

13.81%

2002

100%

7.06%

16.12%

30.55%

11.22%

41.77%

22.61%

64.37%

21.40%

85.77%

14.23%

2003

100%

7.57%

16.77%

31.18%

11.18%

42.36%

22.50%

64.86%

21.15%

86.01%

13.99%

2004

100%

9.14%

19.00%

33.45%

10.90%

44.35%

21.78%

66.13%

20.46%

86.58%

13.42%

2005

100%

10.65%

21.20%

35.75%

10.70%

46.44%

21.08%

67.52%

19.65%

87.17%

12.83%

2006

100%

11.22%

22.06%

36.66%

10.66%

47.32%

20.84%

68.16%

19.33%

87.49%

12.51%

2007

100%

11.93%

22.83%

37.44%

10.61%

48.05%

20.66%

68.71%

19.04%

87.74%

12.26%

2008

100%

9.96%

20.00%

34.73%

11.03%

45.77%

21.62%

67.38%

19.86%

87.25%

12.75%

2009

100%

7.80%

16.93%

31.72%

11.47%

43.19%

22.62%

65.81%

20.71%

86.52%

13.4800%

  Source: Internal Revenue Service

Table 6
Total Income Tax Shares, 1980-2009 (Percent of federal income tax paid by each group)

Year

Total

Top 0.1%

Top 1%

Top 5%

Between 5% & 10%

Top 10%

Between 10% & 25%

Top 25%

Between 25% & 50%

Top 50%

Bottom 50%

1980

100%

 

19.05%

36.84%

12.44%

49.28%

23.74%

73.02%

19.93%

92.95%

7.05%

1981

100%

 

17.58%

35.06%

12.90%

47.96%

24.33%

72.29%

20.26%

92.55%

7.45%

1982

100%

 

19.03%

36.13%

12.45%

48.59%

23.91%

72.50%

20.15%

92.65%

7.35%

1983

100%

 

20.32%

37.26%

12.44%

49.71%

23.39%

73.10%

19.73%

92.83%

7.17%

1984

100%

 

21.12%

37.98%

12.58%

50.56%

22.92%

73.49%

19.16%

92.65%

7.35%

1985

100%

 

21.81%

38.78%

12.67%

51.46%

22.60%

74.06%

18.77%

92.83%

7.17%

1986

100%

 

25.75%

42.57%

12.12%

54.69%

21.33%

76.02%

17.52%

93.54%

6.46%

Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable

1987

100%

 

24.81%

43.26%

12.35%

55.61%

21.31%

76.92%

17.02%

93.93%

6.07%

1988

100%

 

27.58%

45.62%

11.66%

57.28%

20.57%

77.84%

16.44%

94.28%

5.72%

1989

100%

 

25.24%

43.94%

11.85%

55.78%

21.44%

77.22%

16.94%

94.17%

5.83%

1990

100%

 

25.13%

43.64%

11.73%

55.36%

21.66%

77.02%

17.16%

94.19%

5.81%

1991

100%

 

24.82%

43.38%

12.45%

55.82%

21.46%

77.29%

17.23%

94.52%

5.48%

1992

100%

 

27.54%

45.88%

12.12%

58.01%

20.47%

78.48%

16.46%

94.94%

5.06%

1993

100%

 

29.01%

47.36%

11.88%

59.24%

20.03%

79.27%

15.92%

95.19%

4.81%

1994

100%

 

28.86%

47.52%

11.93%

59.45%

20.10%

79.55%

15.68%

95.23%

4.77%

1995

100%

 

30.26%

48.91%

11.84%

60.75%

19.62%

80.36%

15.03%

95.39%

4.61%

1996

100%

 

32.31%

50.97%

11.54%

62.51%

18.80%

81.32%

14.36%

95.68%

4.32%

1997

100%

 

33.17%

51.87%

11.33%

63.20%

18.47%

81.67%

14.05%

95.72%

4.28%

1998

100%

 

34.75%

53.84%

11.20%

65.04%

17.65%

82.69%

13.10%

95.79%

4.21%

1999

100%

 

36.18%

55.45%

11.00%

66.45%

17.09%

83.54%

12.46%

96.00%

4.00%

2000

100%

 

37.42%

56.47%

10.86%

67.33%

16.68%

84.01%

12.08%

96.09%

3.91%

2001

100%

16.06%

33.89%

53.25%

11.64%

64.89%

18.01%

82.90%

13.13%

96.03%

3.97%

2002

100%

15.43%

33.71%

53.80%

11.94%

65.73%

18.16%

83.90%

12.60%

96.50%

3.50%

2003

100%

15.68%

34.27%

54.36%

11.48%

65.84%

18.04%

83.88%

12.65%

96.54%

3.46%

2004

100%

17.44%

36.89%

57.13%

11.07%

68.19%

16.67%

84.86%

11.85%

96.70%

3.30%

2005

100%

19.26%

39.38%

59.67%

10.63%

70.30%

15.69%

85.99%

10.94%

96.93%

3.07%

2006

100%

19.56%

39.89%

60.14%

10.65%

70.79%

15.47%

86.27%

10.75%

97.01%

2.99%

2007

100%

20.19%

40.41%

60.61%

10.59%

71.20%

15.37%

86.57%

10.54%

97.11%

2.89%

2008

100%

18.47%

38.02%

58.72%

11.22%

69.94%

16.40%

86.34%

10.96%

97.30%

2.70%

2009

100%

17.11%

36.73%

58.66%

11.81%

70.47%

16.83%

87.30%

10.45%

97.75%

2.25%

  Source: Internal Revenue Service

Table 7
Dollar Cut-Off, 1980-2009 (Minimum AGI for tax return to fall into various percentiles; Thresholds not adjusted for inflation)

Year

Total

Top 0.1%

Top 1%

Top 5%

Top 10%

Top 25%

Top 50%

1980

0

 

$80,580

$43,792

$35,070

$23,606

$12,936

1981

0

 

$85,428

$47,845

$38,283

$25,655

$14,000

1982

0

 

$89,388

$49,284

$39,676

$27,027

$14,539

1983

0

 

$93,512

$51,553

$41,222

$27,827

$15,044

1984

0

 

$100,889

$55,423

$43,956

$29,360

$15,998

1985

0

 

$108,134

$58,883

$46,322

$30,928

$16,688

1986

0

 

$118,818

$62,377

$48,656

$32,242

$17,302

Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable

1987

0

 

$139,289

$68,414

$52,921

$33,983

$17,768

1988

0

 

$157,136

$72,735

$55,437

$35,398

$18,367

1989

0

 

$163,869

$76,933

$58,263

$36,839

$18,993

1990

0

 

$167,421

$79,064

$60,287

$38,080

$19,767

1991

0

 

$170,139

$81,720

$61,944

$38,929

$20,097

1992

0

 

$181,904

$85,103

$64,457

$40,378

$20,803

1993

0

 

$185,715

$87,386

$66,077

$41,210

$21,179

1994

0

 

$195,726

$91,226

$68,753

$42,742

$21,802

1995

0

 

$209,406

$96,221

$72,094

$44,207

$22,344

1996

0

 

$227,546

$101,141

$74,986

$45,757

$23,174

1997

0

 

$250,736

$108,048

$79,212

$48,173

$24,393

1998

0

 

$269,496

$114,729

$83,220

$50,607

$25,491

1999

0

 

$293,415

$120,846

$87,682

$52,965

$26,415

2000

0

 

$313,469

$128,336

$92,144

$55,225

$27,682

2001

0

$1,324,487

$292,913

$127,904

$92,754

$56,085

$28,528

2002

0

$1,191,673

$285,424

$126,525

$92,663

$56,401

$28,654

2003

0

$1,262,760

$295,495

$130,080

$94,891

$57,343

$29,019

2004

0

$1,548,941

$328,049

$137,056

$99,112

$60,041

$30,122

2005

0

$1,848,791

$364,657

$145,283

$103,912

$62,068

$30,881

2006

0

$2,044,689

$388,806

$153,542

$108,904

$64,702

$31,987

2007

0

$2,155,365

$410,096

$160,041

$113,018

$66,532

$32,879

2008

0

$1,803,585

$380,354

$159,619

$113,799

$67,280

$33,048

2009

0

$1,432,890

$343,927

$154,643

$112,124

$66,193

$32,396

  Source: Internal Revenue Service

Table 8
Average Tax Rate, 1980-2009 (Percent of AGI paid in income taxes)

Year

Total

Top 0.1%

Top 1%

Top 5%

Between 5% & 10%

Top 10%

Between 10% & 25%

Top 25%

Between 25% & 50%

Top 50%

Bottom 50%

1980

15.31%

 

34.47%

26.85%

17.13%

23.49%

14.80%

19.72%

11.91%

17.29%

6.10%

1981

15.76%

 

33.37%

26.59%

18.16%

23.64%

15.53%

20.11%

12.48%

17.73%

6.62%

1982

14.72%

 

31.43%

25.05%

16.61%

22.17%

14.35%

18.79%

11.63%

16.57%

6.10%

1983

13.79%

 

30.18%

23.64%

15.54%

20.91%

13.20%

17.62%

10.76%

15.52%

5.66%

1984

13.68%

 

29.92%

23.42%

15.57%

20.81%

12.90%

17.47%

10.48%

15.35%

5.77%

1985

13.73%

 

29.86%

23.50%

15.69%

20.93%

12.83%

17.55%

10.41%

15.41%

5.70%

1986

14.54%

 

33.13%

25.68%

15.99%

22.64%

12.97%

18.72%

10.48%

16.32%

5.63%

Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable

1987

13.12%

 

26.41%

22.10%

14.43%

19.77%

11.71%

16.61%

9.45%

14.60%

5.09%

1988

13.21%

 

24.04%

21.14%

14.07%

19.18%

11.82%

16.47%

9.60%

14.64%

5.06%

1989

13.12%

 

23.34%

20.71%

13.93%

18.77%

12.08%

16.27%

9.77%

14.53%

5.11%

1990

12.95%

 

23.25%

20.46%

13.63%

18.50%

12.01%

16.06%

9.73%

14.36%

5.01%

1991

12.75%

 

24.37%

20.62%

13.96%

18.63%

11.57%

15.93%

9.55%

14.20%

4.62%

1992

12.94%

 

25.05%

21.19%

13.99%

19.13%

11.39%

16.25%

9.42%

14.44%

4.39%

1993

13.32%

 

28.01%

22.71%

14.01%

20.20%

11.40%

16.90%

9.37%

14.90%

4.29%

1994

13.50%

 

28.23%

23.04%

14.20%

20.48%

11.57%

17.15%

9.42%

15.11%

4.32%

1995

13.86%

 

28.73%

23.53%

14.46%

20.97%

11.71%

17.58%

9.43%

15.47%

4.39%

1996

14.34%

 

28.87%

24.07%

14.74%

21.55%

11.86%

18.12%

9.53%

15.96%

4.40%

1997

14.48%

 

27.64%

23.62%

14.87%

21.36%

12.04%

18.18%

9.63%

16.09%

4.48%

1998

14.42%

 

27.12%

23.63%

14.79%

21.42%

11.63%

18.16%

9.12%

16.00%

4.44%

1999

14.85%

 

27.53%

24.18%

15.06%

21.98%

11.76%

18.66%

9.12%

16.43%

4.48%

2000

15.26%

 

27.45%

24.42%

15.48%

22.34%

12.04%

19.09%

9.28%

16.86%

4.60%

2001

14.23%

28.20%

27.50%

23.68%

14.89%

21.41%

11.58%

18.08%

8.91%

15.85%

4.09%

2002

13.03%

28.49%

27.25%

22.95%

13.87%

20.51%

10.47%

16.99%

7.67%

14.66%

3.21%

2003

11.90%

24.64%

24.31%

20.74%

12.22%

18.49%

9.54%

15.38%

7.12%

13.35%

2.95%

2004

12.10%

23.09%

23.49%

20.67%

12.28%

18.60%

9.26%

15.53%

7.01%

13.51%

2.97%

2005

12.45%

22.52%

23.13%

20.78%

12.37%

18.84%

9.27%

15.86%

6.93%

13.84%

2.98%

2006

12.60%

21.98%

22.79%

20.68%

12.60%

18.86%

9.36%

15.95%

7.01%

13.98%

3.01%

2007

12.68%

21.46%

22.45%

20.53%

12.66%

18.79%

9.43%

15.98%

7.01%

14.03%

2.99%

2008

12.24%

22.70%

23.27%

20.70%

12.44%

18.71%

9.29%

15.68%

6.75%

13.65%

2.59%

2009

11.06%

24.28%

24.01%

20.46%

11.36%

18.05%

8.25%

14.68%

5.56%

12.50%

1.85%

Source: Internal Revenue Service

Some important facts to keep in mind about the information provided on this page.

(1) All tax returns that have a positive AGI are included, even those that do not have a positive income tax liability.

(2) Income tax after credits (the tax measure above) does not account for the refundable portion of EITC. If it were included (as is often the case with other organizations), the tax share of the top income groups would be higher. The refundable portion is legally classified as a spending program by the Office of Management and Budget and therefore is not included by the IRS in these figures.

(3) The only tax analyzed here is the federal individual income tax, which is responsible for about 25 percent of the nation's taxes paid (at all levels of government). Federal income taxes are much more progressive than payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes (depending upon the economic assumption made about property taxes and corporate income taxes).

(4) AGI is a fairly narrow income concept, and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, worker's compensation benefits and others.

(5) Tax return is the unit of analysis, which is broader than households, especially for those at the bottom end, many of which are dependent returns. Some dependent returns are included in the figures here, and under other units of analysis (like the Treasury Department's Family Economic Unit) would likely be paired with their parents' returns.

(6) The data source is the IRS Statistics of Income Division, which uses a national sample of tax returns to provide the figures used here. The figures above were taken from data that were labeled an "early release" by SOI in October 2011. The 2008 figures and those for previous years on this page were taken from the final percentile data released by the IRS. Figures for 2009 may be subsequently revised.

(7) These figures represent the legal incidence of the income tax, although most distributional tables (such as those from CBO, Tax Policy Center, Citizens for Tax Justice, Treasury, and JCT) assume that the entire economic incidence of personal income taxes falls on the income earner.

[1] See, for example, http://news.salon.com/2010/09/28/us_census_recession_s_impact_1/.

[2] Andrew Chamberlain and Gerald Prante, Tax Foundation Working Paper 1, "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991 - 2004," http://www.taxfoundation.org/files/wp1.pdf.

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