The latest data from the Internal Revenue Service shows that the top 1 percent of income earners in the country are paying close to a third of all federal individual income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es. Preliminary data from the IRS on who pays federal income taxes, released to the Tax Foundation, shows that in 1995 (the latest year for which data is available) 30.2 percent of federal individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. es were paid by the top 1 percent of income earners — approximately 1.17 million filers.
Furthermore, a time series analysis of the data shows that since 1980 the share of federal individual income taxes borne by the top 5 percent of income earners has increased markedly. In 1980 these individuals paid 36.8 percent of federal individual income taxes. By 1995 their share had risen to almost half of the burden. This has led to a corresponding decline in the share of the tax burden shouldered by the remaining 95 percent of filers.Share