President Obama recently gave a lengthy speech on inequality, poverty, and what to do about it. He claimed inequality is increasing, which is debatable, and then offered a few populist ways to reduce it, such as raising...
- Top Five Percent of Taxpayers Pay Over Half of Total Federal Indivi...
Top Five Percent of Taxpayers Pay Over Half of Total Federal Individual Income Taxes
Special Report No. 83
Executive Summary The latest data from the Internal Revenue Service show that more than half of all federal individual income taxes—50.8 percent—are paid by the five percent of taxpayers who earn the most. In 1996, the latest year for which data are available, this top five percent consisted of 6.0 million earners whose adjusted gross incomes (AGI) were higher than $101,202.
Even among this prosperous group, the highest earners paid the lion's share. The top one percent of earners in the country are paying close to a third of all the taxes collected. That's approximately 1.2 million earners who paid 32.3 percent of 1996's federal individual income taxes.
A time series analysis of the data shows that since 1980 the share of federal individual income taxes borne by the top five percent has increased markedly. In 1980 these individuals paid 36.8 percent of federal individual income taxes, a hefty share but significantly less than their 50.8 percent share in 1996. Naturally, this has resulted in a corresponding decline in the share of the tax burden shouldered by the remaining 95 percent of taxpayers.
Lawmakers are currently looking to reform the United States’ corporate tax code, mainly focusing on the high corporate income tax rate. At a combined federal and state rate of 39.1 percent, it is the highest rate in the...
This study provides an in-depth discussion of the distribution of U.S. tax and spending policies across various subgroups of the population, mainly income groups, from 2000-2012. The study finds that in calendar year 2012, governments at all...
Join the Tax Foundation's fight for sound tax policy Go
Tax Policy Blog
The official weblog of the Tax Foundation.
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