Tax Facts for Independence Day 2012

 
 
July 03, 2012

Americans will celebrate the 236th anniversary of American independence on July 4th this year. As students of history will remember, one of the chief complaints of the colonists against the British government in 1776 was unfair and burdensome taxation. With that in mind, the Tax Foundation presents a few facts for Independence Day that highlight the modern American tax system.

Top marginal income tax rate in 1913, the first year the modern income tax was levied: 7%

Inflation-adjusted annual income to qualify for the top rate in 1913: $11,332,304

Top marginal rate for tax year 2011: 35%

Minimum income needed to be subject to top rate in 2011: $379,150

Highest-ever marginal tax income rate: 94%

Years during which highest-ever marginal rate was levied: 1944-1945

Level to which it was lowered after in 1946: 91%

Number of days from the beginning of the year until Tax Freedom Day in 1900: 22

Number of days from the beginning of the year until Tax Freedom Day in 2012: 107

Inflation adjusted income required to be in the top 1% of earners in 1980: $219,970

Income required to be in the top 1% of earners in 2009: $343,927

Share of all federal income taxes paid by the top 1% in 1980: 19.05%

Share of all federal income taxes paid by the top 1% in 2009: 36.73%

Percentage of federal income taxes paid by the bottom 50% of all taxpayers in 1980: 7.05%

Percentage of federal income taxes paid by the bottom 50% of all taxpayers in 2009: 2.25%

Sources: IRS, Tax Foundation analysis.

The Tax Foundation is a nonpartisan research organization that has monitored fiscal policy at the federal, state and local levels since 1937. To schedule an interview, please contact Richard Morrison, the Tax Foundation’s Manager of Communications, at 202-464-5102 or morrison@taxfoundation.org.

Follow Us

Tax Policy Blog

The official weblog of the Tax Foundation.

Go

Tax By State

For information on your state, select it from the drop-down menu.

 

Ask a Tax Expert

Contact information for Tax Foundation policy staff Ask