The Obama Administration yesterday backed down from its plan to tax the earnings on 529 savings accounts, a kind of saving account for higher education under section 529 of the tax code. At Bloomberg, Richard Rubin and...
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- The Tax Rate Paid by the Top 1% Is Double the National Av...
The Tax Rate Paid by the Top 1% Is Double the National Average
The average federal tax rate for all taxpayers rose slightly in 2010 to 11.81 percent, up from 11.06 percent the previous year. The tax rate paid by individuals with incomes in the top 1 percent averaged 23.39 percent, while all filers in the bottom 50 percent paid an average tax rate of 2.37 percent, according to our newest analysis on the distribution of federal income taxes.
In 2010, the top 1 percent of tax returns included 18.87 percent of all adjusted gross income and 37.38 percent of all federal individual income taxes paid. The top 5 percent earned 33.78 percent of income and paid 59.07 percent of taxes, and the top 10 percent earned 45.17 percent of income and paid 70.62 percent of taxes.
The Tax Foundation’s analysis is based on new individual income tax data from the Internal Revenue Service, reporting on calendar year 2010. This year the IRS changed its methodology to exclude dependent filers and include returns with negative adjusted gross income. For comparison’s sake, the new data is presented as far back as the IRS provides, to 2001, with the discontinuity noted for prior years.
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