November 29, 2012 Summary of Latest Federal Income Tax Data William McBride William McBride Print this page Subscribe Support our work Download Fiscal Fact No. 343: Summary of Latest Federal Income Tax Data 2013's report on data from calender year 2011 is available here. Jump to a table: Summary of Federal Income Tax Data, 2010 Number of Federal Individual Income Tax Returns Filed 1980-2010 (In thousands) Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980-2010 ($Billions) Total Income Tax after Credits, 1980-2010 ($ Billions) Adjusted Gross Income Shares, 1980-2010 (Percent of total AGI earned by each group) Total Income Tax Shares, 1980-2010 (Percent of federal income tax paid by each group) Dollar Cut-Off, 1980-2010 (Minimum AGI for tax return to fall into various percentiles; thresholds not adjusted for inflation) Average Tax Rate, 1980-2010 (Percent of AGI paid in income taxes) The Internal Revenue Service has released new data on individual income taxes, reporting on calendar year 2010.[1] As we do every year, we present a summary of that data along with the historical data back to 1980. This year the IRS changed its methodology to exclude dependent filers and include returns with negative AGI. For comparison’s sake, we present this new data as far back as the IRS provides, to 2001, along with the previously reported data for prior years. Here follows the IRS statement regarding this year’s change: This release including the Tax Year 2010 percentile data were [sic] produced using an improved methodology to that of previous SOI releases of percentile data in order to refine the accuracy of the percentile estimates. The data in these tables are based on a modified universe of tax returns. In particular, all individual income tax returns except returns of dependents are now used in the computation whereas previous releases were based on only returns with positive AGI. This change was the result of feedback and recommendations made by users of these statistics who encouraged SOI to assess the utility of the information. The data in the improved tables shown here, while more accurate for the dollar amounts shown are still very similar in terms of percentages when compared to the data produced under the previous methodology.[2] The new methodology results in about 7 to 9 million fewer tax returns in most years but about 5 million fewer returns in 2009 due to the high number of negative AGI returns that year. It also results in a slight overstatement of both the income shares and the average tax rates of the top 1 percent and a slight understatement of the tax shares of the top 1 percent, as compared with the previous methodology.[3] With that in mind, a few points about the data can be made. First, as a result of the tepid economic recovery, incomes and taxes paid for all income groups increased in 2010 but not to the levels achieved during the boom years of 2006 and 2007. Second, average tax rates increased in 2010 for all except the top 1 percent, who saw a slight decrease in their average tax rate from 24.05 percent of income in 2009 to 23.39 percent in 2010. This is still about 10 times the tax rate of the bottom 50 percent of filers, who paid 2.37 percent of their income in 2010. Tax rates have dropped for all filers since 2001 but have done so most precipitously for low-income filers. The bottom 50 percent of filers paid 4.92 percent of their income in 2001, more than twice the rate they paid in 2010. In contrast, the top 1 percent of filers paid 27.6 percent of their income in 2001, which is about 4 points higher than their 2010 rate. Finally, as many have noted, incomes have stagnated for low-income households in recent years, but this is true for high-income households as well.[4] In real inflation-adjusted terms, the income thresholds for all percentiles, including the top 50 percent, the top 1 percent, and the top 0.1 percent are lower than they were in 2001 (not shown). That means the nominal income increases since 2001, shown in Table 7, are entirely due to inflation. In terms of income shares, there has been more growth of income at the top, at least since 2001. The income share of the top 1 percent rebounded slightly to 18.87 percent of income in 2010 after bottoming out in 2009. However, the top share remains lower than it was at any time during the economic expansion of 2004 to 2008. Table 1. Summary of Federal Income Tax Data, 2010 Number of Returns* AGI ($ millions) Income Taxes Paid ($ millions) Group's Share of Total AGI Group's Share of Income Taxes Income Split Point Average Tax Rate All Taxpayers 135,033,492 $8,039,779 $949,144 100.0% 100.0% – 11.81% Top 1% 1,350,335 $1,517,146 $354,810 18.9% 37.4% $369,691 23.39% 1-5% 5,401,340 $1,199,053 $205,839 14.9% 21.7% 17.17% Top 5% 6,751,675 $2,716,199 $560,649 33.8% 59.1% $161,579 20.64% 5-10% 6,751,674 $915,165 $109,670 11.4% 11.6% 11.98% Top 10% 13,503,349 $3,631,364 $670,319 45.2% 70.6% $116,623 18.46% 10-25% 20,255,024 $1,799,588 $156,477 22.4% 16.5% 8.70% Top 25% 33,758,373 $5,430,952 $826,796 67.6% 87.1% $69,126 15.22% 25-50% 33,758,373 $1,664,728 $99,986 20.7% 10.5% 6.01% Top 50% 67,516,746 $7,095,680 $926,782 88.3% 97.6% $34,338 13.06% Bottom 50% 67,516,746 $944,099 $22,363 11.7% 2.4% <$34,338 2.37% Source: Internal Revenue Service *Does not include dependent filers. Table 2. Number of Federal Individual Income Tax Returns Filed 1980-2010 (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% 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 Source: Internal Revenue Service Table 3. Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980-2010 ($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% 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 $944 Source: IRS Table 4. Total Income Tax after Credits, 1980-2010 ($ 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% 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 Source: IRS Table 5. Adjusted Gross Income Shares, 1980-2010 (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% 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% Source: IRS Table 6. Total Income Tax Shares, 1980-2010 (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% 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% Source: IRS Table 7. Dollar Cut-Off, 1980-2010 (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% 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 Source: IRS Table 8. Average Tax Rate, 1980-2010 (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% 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% Source: IRS Some important facts to keep in mind about the information provided here. (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 tax, 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) The data source is the IRS Statistics of Income Division, which uses a national sample of tax returns to provide the figures used here. The figures above for 2010 were taken from data that were labeled an "early release" by SOI in November 2012. The 2009 figures and those for previous years on this page were taken from the final percentile data released by the IRS. Figures for 2010 may be subsequently revised. (7) 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, Treasury, and JCT) assume that the entire economic incidence of personal income taxes falls on the income earner. [1] Internal Revenue Service, SOI Stats – Individual Statistical Tables by Tax Rate and Income Percentile, http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Statistical-Tables-by-Tax-Rate-and-Income-Percentile. [2] Id. [3] David Logan, Summary of Latest Federal Income Tax Data, Tax Foundation Fiscal Fact No. 285 (Oct. 24, 2011), https://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0. For a more directly comparable time series of data across decades going back to 1979, see the CBO’s report, discussed in William McBride, CBO Report Shows Increasing Redistribution in the Tax Code Despite No Long-Term Trend in Income Inequality, Tax Foundation Fiscal Fact No. 322 (July 24, 2012), https://taxfoundation.org/article/cbo-report-shows-increasing-redistribution-tax-code-despite-no-long-term-trend-income-inequality. [4] Bruce Bartlett, Tax Cuts, Tax Rates and Tax Shares, New York Times Economix Blog, Nov. 27, 2012, http://economix.blogs.nytimes.com/2012/11/27/tax-cuts-tax-rates-and-tax-shares/. Topics Center for Federal Tax Policy Individual Income and Payroll Taxes Research Tags Putting a Face on America's Tax Returns
