An Overlooked Two-Year Trend: Incomes of the Top 1 Percent Decline While Effective Rates Increase
It’s true. In 2008 and 2009, the average taxpayer in the top 1 percent made less money than they did in the prior year, but paid a higher effective income tax rate.
Embroiled in debate over whether the richest of the rich are paying their “fair share,” advocates of both sides should take a serious look at the raw data before continuing an increasingly polarizing discourse. The following IRS data shows the trend (a more detailed table can be found here):
|
Top 1 Percent of Taxpayers |
||
|
(filers earning at least $343,927 per year) |
||
|
Average Adjusted Gross Income Per Year (in millions) |
Average Tax Rate |
|
|
2007 |
$1.4 |
22.45% |
|
2008 |
$1.2 |
23.27% |
|
2009 |
$1.0 |
24.01% |
Though part of this trend is due to a sharp decline in capital gains, to leave the above data out of the debate solely due to this factor would be disingenuous. Though emotions are certainly running high, it may be wise to temper them with the facts.
Follow David S. Logan on Twitter @Loganomix