Summary of Latest Federal Income Tax Data

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The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2012, showing the number of taxpayers, adjusted gross incomeFor individuals, gross income is the total pre-tax earnings from wages, tips, investments, interest, and other forms of income and is also referred to as “gross pay.” For businesses, gross income is total revenue minus cost of goods sold and is also known as “gross profit” or “gross margin.” , and 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. shares by income percentiles.[1]

The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners.

• In 2012, 136.1 million taxpayers reported earning $9.04 trillion in adjusted gross income and paid $1.1 trillion in income taxes.
• All income groups increased their income and taxes paid over the previous year.
• The top 1 percent of taxpayers earned their largest share of income since 2007 at 21.9 percent of total AGI and paid their largest share of the income tax burden since the same year at 38.1 percent of total income taxes.
• In 2012, the top 50 percent of all taxpayers (68 million filers) paid 97.2 percent of all income taxes while the bottom 50 percent paid the remaining 2.8 percent.
• The top 1 percent (1.3 million filers) paid a greater share of income taxes (38.1 percent) than the bottom 90 percent (122.4 million filers) combined (29.8 percent).
• The top 1 percent of taxpayers paid a higher effective income tax rate than any other group at 22.8 percent, which is nearly 7 times higher than taxpayers in the bottom 50 percent (3.28 percent).

Taxpayers Reported $9.04 Trillion in Adjusted Gross Income and Paid $1.19 Trillion in Income Taxes in 2012

Taxpayers reported $9.04 trillion in adjusted gross income (AGI) on 136.1 million tax returns in 2012. This represents $725 billion in additional income over 2011 on 500,000 fewer tax returns. While the majority of the income gain went to the top 5 percent of taxpayers (those making $175,817 or more), every income group experienced an increase in income in 2012. Due to the increase in incomes, taxes paid increased by $142 billion to $1.185 trillion in 2012. Taxes paid increased for all income groups.

The share of income earned by the top 1 percent increased to 21.9 percent of total AGI, the highest level since the peak year of 2007 (22.9 percent of total AGI). The share of the income tax burden for the top 1 percent increased to 38.1 percent from 35.1 percent in 2011, also the highest level since the peak in 2007 (39.8 percent).

Table 1. Summary of Federal Income Tax Data, 2012

	Number of Returns*	AGI ($ millions)	Income Taxes Paid ($ millions)	Group’s Share of Total AGI (IRS)	Group’s Share of Income Taxes	Income Split Point	Average Tax Rate
*Does not include dependent filers.
All Taxpayers	136,080,353	9,041,744	1,184,978	100.0%	100.0%
Top 1%	1,360,804	1,976,738	451,328	21.9%	38.1%	> $434,682	22.8%
1-5%	5,443,214	1,354,206	247,215	15.0%	20.9%		18.3%
Top 5%	6,804,018	3,330,944	698,543	36.8%	58.9%	> $175,817	21.0%
5-10%	6,804,017	996,955	132,902	11.0%	11.2%		13.3%
Top 10%	13,608,035	4,327,899	831,445	47.9%	70.2%	> $125,195	19.2%
10-25%	20,412,053	1,933,778	192,601	21.4%	16.3%		10.0%
Top 25%	34,020,088	6,261,677	1,024,046	69.3%	86.4%	> $73,354	16.4%
25-50%	34,020,089	1,776,123	128,017	19.6%	10.8%		7.2%
Top 50%	68,040,177	8,037,800	1,152,063	88.9%	97.2%	> $36,055	14.3%
Bottom 50%	68,040,177	1,003,944	32,915	11.1%	2.8%	< $36,055	3.3%

Top 50 Percent of All Taxpayers Paid 97.2 Percent of All Federal Income Taxes; Top 1 Percent Paid 38.1 Percent; and Bottom 90 Percent Paid 29.7 Percent of All Federal Income Taxes

Figure 1 shows the distribution of AGI and income taxes paid by income percentiles in 2012. In 2012, the bottom 50 percent of taxpayers (those with AGIs below $36,055) earned 11.1 percent of total AGI. This group of taxpayers paid approximately $33 billion in taxes, or 2.8 percent of all income taxes in 2012.

In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $434,682 and above), earned 21.9 percent of all AGI in 2012, but paid 38.1 percent of all federal income taxes.

Combined, the top 1 percent of taxpayers (those with AGIs above $434,682) accounted for more income taxes paid than the bottom 90 percent (those with AGIs below $125,195) combined. In 2012, the top 1 percent of taxpayers paid $451 billion in income taxes, or 38.1 percent of all income taxes while the bottom 90 percent paid $353 billion in income taxes, or 29.8 percent of all income taxes paid.

The Top 1 Percent’s Effective Tax Rate Is Nearly Seven Times Higher than the Bottom 50 percent’s

The 2012 IRS data shows that taxpayers with higher incomes pay much higher effective income tax rates than lower-income taxpayers.

The bottom 50 percent of taxpayers (taxpayers with AGIs under $36,055) faced an average effective income tax rate of 3.3 percent. As taxpayer AGI increases, the IRS data shows that average income tax rates rise. For example, taxpayers with AGIs between the 10th and 5th percentile ($125,195 and $175,817) pay an average effective rate of 13.3 percent—four times the rate paid by those in the bottom 50 percent.

The top 1 percent of taxpayers (AGI of $434,682 and higher) paid the highest effective income tax rate at 22.8 percent, 6.9 times the rate faced by the bottom 50 percent of taxpayers. The top 1 percent’s average effective tax rate for 2012 of 22.8 percent was slightly lower than that of 2011 (23.5 percent).

Taxpayers at the very top of the income distribution, the top 0.1 percent, which includes taxpayers with incomes over $2.2 million, actually paid a slightly lower income tax rate than the top 1 percent (21.7 percent versus 22.8 percent). This is due to the fact that very high income taxpayers are more likely to report a greater share of their income as taxable capital gains income. This leads to a slightly lower effective tax rate because capital gains and dividends income faces a lower top income tax rate (23.8 percent) than wage and business income (39.6 percent). It is important to note, however, that capital gains taxes at the individual level are the second layer of tax after the corporate income tax (which is 35 percent).

Appendix

Table 2. Number of Federal Individual Income Tax Returns Filed 1980–2012 (In thousands)

Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%
Source: Internal Revenue Service.
1980	93,239		932	4,662	4,662	9,324	13,986	23,310	23,310	46,619	46,619
1981	94,587		946	4,729	4,729	9,459	14,188	23,647	23,647	47,293	47,293
1982	94,426		944	4,721	4,721	9,443	14,164	23,607	23,607	47,213	47,213
1983	95,331		953	4,767	4,767	9,533	14,300	23,833	23,833	47,665	47,665
1984	98,436		984	4,922	4,922	9,844	14,765	24,609	24,609	49,218	49,219
1985	100,625		1,006	5,031	5,031	10,063	15,094	25,156	25,156	50,313	50,313
1986	102,088		1,021	5,104	5,104	10,209	15,313	25,522	25,522	51,044	51,044
Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987	106,155		1,062	5,308	5,308	10,615	15,923	26,539	26,539	53,077	53,077
1988	108,873		1,089	5,444	5,444	10,887	16,331	27,218	27,218	54,436	54,436
1989	111,313		1,113	5,566	5,566	11,131	16,697	27,828	27,828	55,656	55,656
1990	112,812		1,128	5,641	5,641	11,281	16,922	28,203	28,203	56,406	56,406
1991	113,804		1,138	5,690	5,690	11,380	17,071	28,451	28,451	56,902	56,902
1992	112,653		1,127	5,633	5,633	11,265	16,898	28,163	28,163	56,326	56,326
1993	113,681		1,137	5,684	5,684	11,368	17,052	28,420	28,420	56,841	56,841
1994	114,990		1,150	5,749	5,749	11,499	17,248	28,747	28,747	57,495	57,495
1995	117,274		1,173	5,864	5,864	11,727	17,591	29,319	29,319	58,637	58,637
1996	119,442		1,194	5,972	5,972	11,944	17,916	29,860	29,860	59,721	59,721
1997	121,503		1,215	6,075	6,075	12,150	18,225	30,376	30,376	60,752	60,752
1998	123,776		1,238	6,189	6,189	12,378	18,566	30,944	30,944	61,888	61,888
1999	126,009		1,260	6,300	6,300	12,601	18,901	31,502	31,502	63,004	63,004
2000	128,227		1,282	6,411	6,411	12,823	19,234	32,057	32,057	64,114	64,114
IRS changed methodology, so data above and below this line not strictly comparable
2001	119,371	119	1,194	5,969	5,969	11,937	17,906	29,843	29,843	59,685	59,685
2002	119,851	120	1,199	5,993	5,993	11,985	17,978	29,963	29,963	59,925	59,925
2003	120,759	121	1,208	6,038	6,038	12,076	18,114	30,190	30,190	60,379	60,379
2004	122,510	123	1,225	6,125	6,125	12,251	18,376	30,627	30,627	61,255	61,255
2005	124,673	125	1,247	6,234	6,234	12,467	18,701	31,168	31,168	62,337	62,337
2006	128,441	128	1,284	6,422	6,422	12,844	19,266	32,110	32,110	64,221	64,221
2007	132,655	133	1,327	6,633	6,633	13,265	19,898	33,164	33,164	66,327	66,327
2008	132,892	133	1,329	6,645	6,645	13,289	19,934	33,223	33,223	66,446	66,446
2009	132,620	133	1,326	6,631	6,631	13,262	19,893	33,155	33,155	66,310	66,310
2010	135,033	135	1,350	6,752	6,752	13,503	20,255	33,758	33,758	67,517	67,517
2011	136,586	137	1,366	6,829	6,829	13,659	20,488	34,146	34,146	68,293	68,293
2012	136,080	136	1,361	6,804	6,804	13,608	20,412	34,020	34,020	68,040	68,040

Table 3. Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980–2012 ($Billions)

Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%
Source: Internal Revenue Service.
1980	$1,627		$138	$342	$181	$523	$400	$922	$417	$1,339	$288
1981	$1,791		$149	$372	$201	$573	$442	$1,015	$458	$1,473	$318
1982	$1,876		$167	$398	$207	$605	$460	$1,065	$478	$1,544	$332
1983	$1,970		$183	$428	$217	$646	$481	$1,127	$498	$1,625	$344
1984	$2,173		$210	$482	$240	$723	$528	$1,251	$543	$1,794	$379
1985	$2,344		$235	$531	$260	$791	$567	$1,359	$580	$1,939	$405
1986	$2,524		$285	$608	$278	$887	$604	$1,490	$613	$2,104	$421
Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987	$2,814		$347	$722	$316	$1,038	$671	$1,709	$664	$2,374	$440
1988	$3,124		$474	$891	$342	$1,233	$718	$1,951	$707	$2,658	$466
1989	$3,299		$468	$918	$368	$1,287	$768	$2,054	$751	$2,805	$494
1990	$3,451		$483	$953	$385	$1,338	$806	$2,144	$788	$2,933	$519
1991	$3,516		$457	$943	$400	$1,343	$832	$2,175	$809	$2,984	$532
1992	$3,681		$524	$1,031	$413	$1,444	$856	$2,299	$832	$3,131	$549
1993	$3,776		$521	$1,048	$426	$1,474	$883	$2,358	$854	$3,212	$563
1994	$3,961		$547	$1,103	$449	$1,552	$929	$2,481	$890	$3,371	$590
1995	$4,245		$620	$1,223	$482	$1,705	$985	$2,690	$938	$3,628	$617
1996	$4,591		$737	$1,394	$515	$1,909	$1,043	$2,953	$992	$3,944	$646
1997	$5,023		$873	$1,597	$554	$2,151	$1,116	$3,268	$1,060	$4,328	$695
1998	$5,469		$1,010	$1,797	$597	$2,394	$1,196	$3,590	$1,132	$4,721	$748
1999	$5,909		$1,153	$2,012	$641	$2,653	$1,274	$3,927	$1,199	$5,126	$783
2000	$6,424		$1,337	$2,267	$688	$2,955	$1,358	$4,314	$1,276	$5,590	$834
IRS changed methodology, so data above and below this line not strictly comparable
2001	$6,116	$492	$1,065	$1,934	$666	$2,600	$1,334	$3,933	$1,302	$5,235	$881
2002	$5,982	$421	$960	$1,812	$660	$2,472	$1,339	$3,812	$1,303	$5,115	$867
2003	$6,157	$466	$1,030	$1,908	$679	$2,587	$1,375	$3,962	$1,325	$5,287	$870
2004	$6,735	$615	$1,279	$2,243	$725	$2,968	$1,455	$4,423	$1,403	$5,826	$908
2005	$7,366	$784	$1,561	$2,623	$778	$3,401	$1,540	$4,940	$1,473	$6,413	$953
2006	$7,970	$895	$1,761	$2,918	$841	$3,760	$1,652	$5,412	$1,568	$6,980	$990
2007	$8,622	$1,030	$1,971	$3,223	$905	$4,128	$1,770	$5,898	$1,673	$7,571	$1,051
2008	$8,206	$826	$1,657	$2,868	$905	$3,773	$1,782	$5,555	$1,673	$7,228	$978
2009	$7,579	$602	$1,305	$2,439	$878	$3,317	$1,740	$5,058	$1,620	$6,678	$900
2010	$8,040	$743	$1,517	$2,716	$915	$3,631	$1,800	$5,431	$1,665	$7,096	$944
2011	$8,317	$737	$1,556	$2,819	$956	$3,775	$1,866	$5,641	$1,716	$7,357	$961
2012	$9,042	$1,017	$1,977	$3,331	$997	$4,328	$1,934	$6,262	$1,776	$8,038	$1,004

Table 4. Total Income Tax after Credits, 1980–2012 ($Billions)

Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%
Source: Internal Revenue Service.
1980	$249		$47	$92	$31	$123	$59	$182	$50	$232	$18
1981	$282		$50	$99	$36	$135	$69	$204	$57	$261	$21
1982	$276		$53	$100	$34	$134	$66	$200	$56	$256	$20
1983	$272		$55	$101	$34	$135	$64	$199	$54	$252	$19
1984	$297		$63	$113	$37	$150	$68	$219	$57	$276	$22
1985	$322		$70	$125	$41	$166	$73	$238	$60	$299	$23
1986	$367		$94	$156	$44	$201	$78	$279	$64	$343	$24
Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987	$369		$92	$160	$46	$205	$79	$284	$63	$347	$22
1988	$413		$114	$188	$48	$236	$85	$321	$68	$389	$24
1989	$433		$109	$190	$51	$241	$93	$334	$73	$408	$25
1990	$447		$112	$195	$52	$248	$97	$344	$77	$421	$26
1991	$448		$111	$194	$56	$250	$96	$347	$77	$424	$25
1992	$476		$131	$218	$58	$276	$97	$374	$78	$452	$24
1993	$503		$146	$238	$60	$298	$101	$399	$80	$479	$24
1994	$535		$154	$254	$64	$318	$108	$425	$84	$509	$25
1995	$588		$178	$288	$70	$357	$115	$473	$88	$561	$27
1996	$658		$213	$335	$76	$411	$124	$535	$95	$630	$28
1997	$727		$241	$377	$82	$460	$134	$594	$102	$696	$31
1998	$788		$274	$425	$88	$513	$139	$652	$103	$755	$33
1999	$877		$317	$486	$97	$583	$150	$733	$109	$842	$35
2000	$981		$367	$554	$106	$660	$164	$824	$118	$942	$38
IRS changed methodology, so data above and below this line not strictly comparable
2001	$885	$139	$294	$462	$101	$564	$158	$722	$120	$842	$43
2002	$794	$120	$263	$420	$93	$513	$143	$657	$104	$761	$33
2003	$746	$115	$251	$399	$85	$484	$133	$617	$98	$715	$30
2004	$829	$142	$301	$467	$91	$558	$137	$695	$102	$797	$32
2005	$932	$176	$361	$549	$98	$647	$145	$793	$106	$898	$33
2006	$1,020	$196	$402	$607	$108	$715	$157	$872	$113	$986	$35
2007	$1,112	$221	$443	$666	$117	$783	$170	$953	$122	$1,075	$37
2008	$1,029	$187	$386	$597	$115	$712	$168	$880	$117	$997	$32
2009	$863	$146	$314	$502	$101	$604	$146	$749	$93	$842	$21
2010	$949	$170	$355	$561	$110	$670	$156	$827	$100	$927	$22
2011	$1,043	$168	$366	$589	$123	$712	$181	$893	$120	$1,012	$30
2012	$1,185	$220	$451	$699	$133	$831	$193	$1,024	$128	$1,152	$33

Table 5. Adjusted Gross Income Shares, 1980–2012 (percent of total AGI earned by each group)

Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%
Source: Internal Revenue Service.
1980	100%		8.46%	21.01%	11.12%	32.13%	24.57%	56.70%	25.62%	82.32%	17.68%
1981	100%		8.30%	20.78%	11.20%	31.98%	24.69%	56.67%	25.59%	82.25%	17.75%
1982	100%		8.91%	21.23%	11.03%	32.26%	24.53%	56.79%	25.50%	82.29%	17.71%
1983	100%		9.29%	21.74%	11.04%	32.78%	24.44%	57.22%	25.30%	82.52%	17.48%
1984	100%		9.66%	22.19%	11.06%	33.25%	24.31%	57.56%	25.00%	82.56%	17.44%
1985	100%		10.03%	22.67%	11.10%	33.77%	24.21%	57.97%	24.77%	82.74%	17.26%
1986	100%		11.30%	24.11%	11.02%	35.12%	23.92%	59.04%	24.30%	83.34%	16.66%
Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987	100%		12.32%	25.67%	11.23%	36.90%	23.85%	60.75%	23.62%	84.37%	15.63%
1988	100%		15.16%	28.51%	10.94%	39.45%	22.99%	62.44%	22.63%	85.07%	14.93%
1989	100%		14.19%	27.84%	11.16%	39.00%	23.28%	62.28%	22.76%	85.04%	14.96%
1990	100%		14.00%	27.62%	11.15%	38.77%	23.36%	62.13%	22.84%	84.97%	15.03%
1991	100%		12.99%	26.83%	11.37%	38.20%	23.65%	61.85%	23.01%	84.87%	15.13%
1992	100%		14.23%	28.01%	11.21%	39.23%	23.25%	62.47%	22.61%	85.08%	14.92%
1993	100%		13.79%	27.76%	11.29%	39.05%	23.40%	62.45%	22.63%	85.08%	14.92%
1994	100%		13.80%	27.85%	11.34%	39.19%	23.45%	62.64%	22.48%	85.11%	14.89%
1995	100%		14.60%	28.81%	11.35%	40.16%	23.21%	63.37%	22.09%	85.46%	14.54%
1996	100%		16.04%	30.36%	11.23%	41.59%	22.73%	64.32%	21.60%	85.92%	14.08%
1997	100%		17.38%	31.79%	11.03%	42.83%	22.22%	65.05%	21.11%	86.16%	13.84%
1998	100%		18.47%	32.85%	10.92%	43.77%	21.87%	65.63%	20.69%	86.33%	13.67%
1999	100%		19.51%	34.04%	10.85%	44.89%	21.57%	66.46%	20.29%	86.75%	13.25%
2000	100%		20.81%	35.30%	10.71%	46.01%	21.15%	67.15%	19.86%	87.01%	12.99%
IRS changed methodology, so data above and below this line not strictly comparable
2001	100%	8.05%	17.41%	31.61%	10.89%	42.50%	21.80%	64.31%	21.29%	85.60%	14.40%
2002	100%	7.04%	16.05%	30.29%	11.04%	41.33%	22.39%	63.71%	21.79%	85.50%	14.50%
2003	100%	7.56%	16.73%	30.99%	11.03%	42.01%	22.33%	64.34%	21.52%	85.87%	14.13%
2004	100%	9.14%	18.99%	33.31%	10.77%	44.07%	21.60%	65.68%	20.83%	86.51%	13.49%
2005	100%	10.64%	21.19%	35.61%	10.56%	46.17%	20.90%	67.07%	19.99%	87.06%	12.94%
2006	100%	11.23%	22.10%	36.62%	10.56%	47.17%	20.73%	67.91%	19.68%	87.58%	12.42%
2007	100%	11.95%	22.86%	37.39%	10.49%	47.88%	20.53%	68.41%	19.40%	87.81%	12.19%
2008	100%	10.06%	20.19%	34.95%	11.03%	45.98%	21.71%	67.69%	20.39%	88.08%	11.92%
2009	100%	7.94%	17.21%	32.18%	11.59%	43.77%	22.96%	66.74%	21.38%	88.12%	11.88%
2010	100%	9.24%	18.87%	33.78%	11.38%	45.17%	22.38%	67.55%	20.71%	88.26%	11.74%
2011	100%	8.86%	18.70%	33.89%	11.50%	45.39%	22.43%	67.82%	20.63%	88.45%	11.55%
2012	100%	11.25%	21.86%	36.84%	11.03%	47.87%	21.39%	69.25%	19.64%	88.90%	11.10%

Table 6. Total Income Tax Shares, 1980–2012 (percent of federal income tax paid by each group)

Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%
Source: Internal Revenue Service.
1980	100%		19.05%	36.84%	12.44%	49.28%	23.74%	73.02%	19.93%	92.95%	7.05%
1981	100%		17.58%	35.06%	12.90%	47.96%	24.33%	72.29%	20.26%	92.55%	7.45%
1982	100%		19.03%	36.13%	12.45%	48.59%	23.91%	72.50%	20.15%	92.65%	7.35%
1983	100%		20.32%	37.26%	12.44%	49.71%	23.39%	73.10%	19.73%	92.83%	7.17%
1984	100%		21.12%	37.98%	12.58%	50.56%	22.92%	73.49%	19.16%	92.65%	7.35%
1985	100%		21.81%	38.78%	12.67%	51.46%	22.60%	74.06%	18.77%	92.83%	7.17%
1986	100%		25.75%	42.57%	12.12%	54.69%	21.33%	76.02%	17.52%	93.54%	6.46%
Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987	100%		24.81%	43.26%	12.35%	55.61%	21.31%	76.92%	17.02%	93.93%	6.07%
1988	100%		27.58%	45.62%	11.66%	57.28%	20.57%	77.84%	16.44%	94.28%	5.72%
1989	100%		25.24%	43.94%	11.85%	55.78%	21.44%	77.22%	16.94%	94.17%	5.83%
1990	100%		25.13%	43.64%	11.73%	55.36%	21.66%	77.02%	17.16%	94.19%	5.81%
1991	100%		24.82%	43.38%	12.45%	55.82%	21.46%	77.29%	17.23%	94.52%	5.48%
1992	100%		27.54%	45.88%	12.12%	58.01%	20.47%	78.48%	16.46%	94.94%	5.06%
1993	100%		29.01%	47.36%	11.88%	59.24%	20.03%	79.27%	15.92%	95.19%	4.81%
1994	100%		28.86%	47.52%	11.93%	59.45%	20.10%	79.55%	15.68%	95.23%	4.77%
1995	100%		30.26%	48.91%	11.84%	60.75%	19.62%	80.36%	15.03%	95.39%	4.61%
1996	100%		32.31%	50.97%	11.54%	62.51%	18.80%	81.32%	14.36%	95.68%	4.32%
1997	100%		33.17%	51.87%	11.33%	63.20%	18.47%	81.67%	14.05%	95.72%	4.28%
1998	100%		34.75%	53.84%	11.20%	65.04%	17.65%	82.69%	13.10%	95.79%	4.21%
1999	100%		36.18%	55.45%	11.00%	66.45%	17.09%	83.54%	12.46%	96.00%	4.00%
2000	100%		37.42%	56.47%	10.86%	67.33%	16.68%	84.01%	12.08%	96.09%	3.91%
IRS changed methodology, so data above and below this line not strictly comparable
2001	100%	15.68%	33.22%	52.24%	11.44%	63.68%	17.88%	81.56%	13.54%	95.10%	4.90%
2002	100%	15.09%	33.09%	52.86%	11.77%	64.63%	18.04%	82.67%	13.12%	95.79%	4.21%
2003	100%	15.37%	33.69%	53.54%	11.35%	64.89%	17.87%	82.76%	13.17%	95.93%	4.07%
2004	100%	17.12%	36.28%	56.35%	10.96%	67.30%	16.52%	83.82%	12.31%	96.13%	3.87%
2005	100%	18.91%	38.78%	58.93%	10.52%	69.46%	15.61%	85.07%	11.35%	96.41%	3.59%
2006	100%	19.24%	39.36%	59.49%	10.59%	70.08%	15.41%	85.49%	11.10%	96.59%	3.41%
2007	100%	19.84%	39.81%	59.90%	10.51%	70.41%	15.30%	85.71%	10.93%	96.64%	3.36%
2008	100%	18.20%	37.51%	58.06%	11.14%	69.20%	16.37%	85.57%	11.33%	96.90%	3.10%
2009	100%	16.91%	36.34%	58.17%	11.72%	69.89%	16.85%	86.74%	10.80%	97.54%	2.46%
2010	100%	17.88%	37.38%	59.07%	11.55%	70.62%	16.49%	87.11%	10.53%	97.64%	2.36%
2011	100%	16.14%	35.06%	56.49%	11.77%	68.26%	17.36%	85.62%	11.50%	97.11%	2.89%
2012	100%	18.60%	38.09%	58.95%	11.22%	70.17%	16.25%	86.42%	10.80%	97.22%	2.78%

Table 7. Dollar Cut-Off, 1980–2012 (minimum AGI for tax return to fall into various percentiles; thresholds not adjusted for inflation)

Year	Top 0.1%	Top 1%	Top 5%	Top 10%	Top 25%	Top 50%
Source: Internal Revenue Service.
1980		$80,580	$43,792	$35,070	$23,606	$12,936
1981		$85,428	$47,845	$38,283	$25,655	$14,000
1982		$89,388	$49,284	$39,676	$27,027	$14,539
1983		$93,512	$51,553	$41,222	$27,827	$15,044
1984		$100,889	$55,423	$43,956	$29,360	$15,998
1985		$108,134	$58,883	$46,322	$30,928	$16,688
1986		$118,818	$62,377	$48,656	$32,242	$17,302
Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987		$139,289	$68,414	$52,921	$33,983	$17,768
1988		$157,136	$72,735	$55,437	$35,398	$18,367
1989		$163,869	$76,933	$58,263	$36,839	$18,993
1990		$167,421	$79,064	$60,287	$38,080	$19,767
1991		$170,139	$81,720	$61,944	$38,929	$20,097
1992		$181,904	$85,103	$64,457	$40,378	$20,803
1993		$185,715	$87,386	$66,077	$41,210	$21,179
1994		$195,726	$91,226	$68,753	$42,742	$21,802
1995		$209,406	$96,221	$72,094	$44,207	$22,344
1996		$227,546	$101,141	$74,986	$45,757	$23,174
1997		$250,736	$108,048	$79,212	$48,173	$24,393
1998		$269,496	$114,729	$83,220	$50,607	$25,491
1999		$293,415	$120,846	$87,682	$52,965	$26,415
2000		$313,469	$128,336	$92,144	$55,225	$27,682
IRS changed methodology, so data above and below this line not strictly comparable
2001	$1,393,718	$306,635	$132,082	$96,151	$59,026	$31,418
2002	$1,245,352	$296,194	$130,750	$95,699	$59,066	$31,299
2003	$1,317,088	$305,939	$133,741	$97,470	$59,896	$31,447
2004	$1,617,918	$339,993	$140,758	$101,838	$62,794	$32,622
2005	$1,938,175	$379,261	$149,216	$106,864	$64,821	$33,484
2006	$2,124,625	$402,603	$157,390	$112,016	$67,291	$34,417
2007	$2,251,017	$426,439	$164,883	$116,396	$69,559	$35,541
2008	$1,867,652	$392,513	$163,512	$116,813	$69,813	$35,340
2009	$1,469,393	$351,968	$157,342	$114,181	$68,216	$34,156
2010	$1,634,386	$369,691	$161,579	$116,623	$69,126	$34,338
2011	$1,717,675	$388,905	$167,728	$120,136	$70,492	$34,823
2012	$2,161,175	$434,682	$175,817	$125,195	$73,354	$36,055

Table 8. Average Tax Rate, 1980–2012 (percent of AGI paid in income taxes)

Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%
Source: Internal Revenue Service.
1980	15.31%		34.47%	26.85%	17.13%	23.49%	14.80%	19.72%	11.91%	17.29%	6.10%
1981	15.76%		33.37%	26.59%	18.16%	23.64%	15.53%	20.11%	12.48%	17.73%	6.62%
1982	14.72%		31.43%	25.05%	16.61%	22.17%	14.35%	18.79%	11.63%	16.57%	6.10%
1983	13.79%		30.18%	23.64%	15.54%	20.91%	13.20%	17.62%	10.76%	15.52%	5.66%
1984	13.68%		29.92%	23.42%	15.57%	20.81%	12.90%	17.47%	10.48%	15.35%	5.77%
1985	13.73%		29.86%	23.50%	15.69%	20.93%	12.83%	17.55%	10.41%	15.41%	5.70%
1986	14.54%		33.13%	25.68%	15.99%	22.64%	12.97%	18.72%	10.48%	16.32%	5.63%
Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987	13.12%		26.41%	22.10%	14.43%	19.77%	11.71%	16.61%	9.45%	14.60%	5.09%
1988	13.21%		24.04%	21.14%	14.07%	19.18%	11.82%	16.47%	9.60%	14.64%	5.06%
1989	13.12%		23.34%	20.71%	13.93%	18.77%	12.08%	16.27%	9.77%	14.53%	5.11%
1990	12.95%		23.25%	20.46%	13.63%	18.50%	12.01%	16.06%	9.73%	14.36%	5.01%
1991	12.75%		24.37%	20.62%	13.96%	18.63%	11.57%	15.93%	9.55%	14.20%	4.62%
1992	12.94%		25.05%	21.19%	13.99%	19.13%	11.39%	16.25%	9.42%	14.44%	4.39%
1993	13.32%		28.01%	22.71%	14.01%	20.20%	11.40%	16.90%	9.37%	14.90%	4.29%
1994	13.50%		28.23%	23.04%	14.20%	20.48%	11.57%	17.15%	9.42%	15.11%	4.32%
1995	13.86%		28.73%	23.53%	14.46%	20.97%	11.71%	17.58%	9.43%	15.47%	4.39%
1996	14.34%		28.87%	24.07%	14.74%	21.55%	11.86%	18.12%	9.53%	15.96%	4.40%
1997	14.48%		27.64%	23.62%	14.87%	21.36%	12.04%	18.18%	9.63%	16.09%	4.48%
1998	14.42%		27.12%	23.63%	14.79%	21.42%	11.63%	18.16%	9.12%	16.00%	4.44%
1999	14.85%		27.53%	24.18%	15.06%	21.98%	11.76%	18.66%	9.12%	16.43%	4.48%
2000	15.26%		27.45%	24.42%	15.48%	22.34%	12.04%	19.09%	9.28%	16.86%	4.60%
IRS changed methodology, so data above and below this line not strictly comparable
2001	14.47%	28.17%	27.60%	23.91%	15.20%	21.68%	11.87%	18.35%	9.20%	16.08%	4.92%
2002	13.28%	28.48%	27.37%	23.17%	14.15%	20.76%	10.70%	17.23%	8.00%	14.87%	3.86%
2003	12.11%	24.60%	24.38%	20.92%	12.46%	18.70%	9.69%	15.57%	7.41%	13.53%	3.49%
2004	12.31%	23.06%	23.52%	20.83%	12.53%	18.80%	9.41%	15.71%	7.27%	13.68%	3.53%
2005	12.65%	22.48%	23.15%	20.93%	12.61%	19.03%	9.45%	16.04%	7.18%	14.01%	3.51%
2006	12.80%	21.94%	22.80%	20.80%	12.84%	19.02%	9.52%	16.12%	7.22%	14.12%	3.51%
2007	12.90%	21.42%	22.46%	20.66%	12.92%	18.96%	9.61%	16.16%	7.27%	14.19%	3.56%
2008	12.54%	22.67%	23.29%	20.83%	12.66%	18.87%	9.45%	15.85%	6.97%	13.79%	3.26%
2009	11.39%	24.28%	24.05%	20.59%	11.53%	18.19%	8.36%	14.81%	5.76%	12.61%	2.35%
2010	11.81%	22.84%	23.39%	20.64%	11.98%	18.46%	8.70%	15.22%	6.01%	13.06%	2.37%
2011	12.54%	22.82%	23.50%	20.89%	12.83%	18.85%	9.70%	15.82%	6.98%	13.76%	3.13%
2012	13.11%	21.67%	22.83%	20.97%	13.33%	19.21%	9.96%	16.35%	7.21%	14.33%	3.28%

(1) For data prior to 2001, all tax returns that have a positive AGI are included, even those that do not have a positive income tax liability. For data from 2001 forward, returns with negative AGI are also included, but dependent returns are excluded.

(2) Income tax after credits (the tax measure above) does not account for the refundable portion of EITC. If it were included (as is often the case with other organizations), the tax share of the top income groups would be higher. The refundable portion is legally classified as a spending program by the Office of Management and Budget and therefore is not included by the IRS in these figures.

(3) The only tax analyzed here is the 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. , which is responsible for about 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes (depending upon the economic assumption made about property taxes and corporate income taxes).

(4) AGI is a fairly narrow income concept and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, worker’s compensation benefits, and others.

(5) Tax return is the unit of analysis, which is broader than households, especially for those at the bottom end, many of which are dependent returns (prior to 2001). Some dependent returns are included in the figures here prior to 2001, and under other units of analysis (like the Treasury Department’s Family Economic Unit) would likely be paired with their parents’ returns.

(6) These figures represent the legal incidence of the income tax, although most distributional tables (such as those from CBO, Tax Policy Center, Citizens for Tax Justice, the Treasury Department, and JCT) assume that the entire economic incidence of personal income taxes falls on the income earner.

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