Download Summary of Latest Federal Individual Income Tax Data

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Tax Foundation Fiscal Fact No. 285

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Summary of Federal Individual Income Tax Data

Number of Federal Individual Income Tax Returns Filed, 1980-2009

Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980-2009

Total Income Tax after Credits, 1980-2009

Adjusted Gross Income Shares, 1980-2009

Total Income Tax Shares, 1980-2009

Dollar Cut-Off, 1980-2009

Average Tax Rate, 1980-2009

The Internal Revenue Service has released new data on individual income taxes, reporting on calendar year 2009. The year saw no economic improvement from 2008 as unemployment continued to increase.

The amount of individual income tax paid steeply declined by $166 billion, twice the decline from 2007 to 2008. Nationally, average effective income tax rates were at their lowest levels since the IRS began tracking them in 1986. The average tax rate for returns with a positive liability went from 12.24 percent in 2008 to 11.06 percent in 2009.

As the data below show, incomes reported by tax returns at the high end of the income spectrum fell from 2008 to 2009, as did their share of the nation's income and income taxes paid. In 2009, the top 1 percent of tax returns paid 36.7 percent of all federal individual income taxes and earned 16.9 percent of adjusted gross income (AGI), compared to 2008 when those figures were 38.0 percent and 20.0 percent, respectively. Both of those figures-share of income and share of taxes paid-were their lowest since 2003 when the top 1 percent earned 16.7 percent of adjusted gross income and paid 34.3 percent of federal individual income taxes.

Each year from 2005 to 2007, the top 1 percent's constantly growing share of income earned and taxes paid set a record. The 2008 reversal of this trend continued in 2009. In fact, the income share for the top 1 percent of tax returns was lower in 2009 than in 2000, largely due to differences in capital gains.

Another indicator of this reversal in the income and tax shares of the top 1 percent is that, as in 2008, the top 1 percent no longer pays a larger percentage of total income tax than the bottom 95 percent. This trend was exacerbated by the aforementioned precipitous drop in AGI in 2009. During 2009, the bottom 95 percent (AGI under $154,643) paid 41.3 percent of the total collected, a larger share than the 36.7 percent paid by the top 1 percent (AGI over $343,947).

The top-earning 5 percent of taxpayers (AGI equal to or greater than $154,643), however, still paid far more than the bottom 95 percent. The top 5 percent earned 31.7 percent of the nation's adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.

Since 2001, the IRS has also been presenting data on a small subset of the top 1 percent, the top 0.1 percent (the top 10 percent of the top 1 percent). In 2009, this top 0.1 percent filed 137,982 tax returns, reporting 7.8 percent of all adjusted gross income earned and paying approximately 17.1 percent of the nation's federal individual income taxes. The average income for a tax return in the top 0.1 percent was $4.4 million in 2009, while the average amount of income tax paid was $1.07 million, indicating an average effective individual income tax rate of 24.3 percent. It is worth noting that while the average income of a taxpayer in the top 0.1 percent declined in 2009, the effective tax rate for this group actually rose from 2008 to 2009. This counterintuitive result is explained by the diminished capital gains and dividend income on high-income tax returns, income sources that are taxed at lower rates. With their 2009 income more dominated by ordinary income taxed at higher rates, their average rate on high-income consequently rose.

[Note: This very top income group actually has a lower average effective income tax rate than the rest of the top 1 percent of returns because these extremely high-income returns are more likely to have income from capital gains and dividends, which are typically taxed at lower rates. It's worth pointing out that in the case of capital gains and dividends, income derived from these sources has already been taxed once by the corporate income tax, which is not included here, meaning the average effective tax rate numbers can be somewhat misleading.]

Overall, these data on high-income tax returns appear to confirm that the continued economic stagnation had the same diminishing effect on income inequality that most recessions have, and that it occurred for the same reason: a sharp decline in income at the high end. This appears to contradict reports based upon Census data suggesting the opposite[1] that the recession increased income inequality. This inconsistency between IRS data and Census data is explained by a number of factors such as: (1) Census doesn't break down data for the extremely high-income tax returns (it typically stops at the 5 percent threshold), (2) Census income measures do not account for capital gains realizations, and (3) Census data gathered from household surveys are less reliable for income information at the high end of the income spectrum than IRS data.

The IRS data below include all of the 137.98 million tax returns filed in 2009 that had a positive AGI, not just the returns from people who earned enough to owe taxes. These figures exclude those tax returns filing a return merely to receive a stimulus check.

From other IRS data, we can see that in 2009, around 59 million tax returns were filed with either positive or negative AGI that used exemptions, deductions and tax credits to completely wipe out their federal income tax liability. Not only did they get back every dollar that the federal government withheld from their paychecks during 2009, but some even received more money back from the IRS. This is a result of refundable tax credits like the earned income tax credit (EITC), the refundable portion of which is not included in the aggregate percentile data here. (For a detailed paper on the distribution of the entire U.S. fiscal system, including all federal, state and local taxes, read "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991 – 2004."[2]

Including all tax returns that had a positive AGI, taxpayers with an AGI of $159,643 or more in 2009 constituted the nation's top 5 percent of income earners. To break into the top 1 percent, a tax return had to have an AGI of $343,947 or more, which was 10 percent lower than the 2008 threshold of $380,354. The income threshold to break into the top 0.1 percent also fell dramatically from 2008 to 2009, from about $1.8 million in 2008 to $1.4 million in 2009.

Although the 2001 and 2003 tax cuts were across the board (even though certain provisions within those cuts were targeted at various income ranges), the federal individual income tax remains highly progressive. The average tax rate in 2009 ranged from around 1.9 percent of income for the bottom half of tax returns to 24.0 percent for the top 1 percent. With the possible exception of the estate tax, the federal income tax is the most progressive tax in the United States, and these numbers show why.

The source for the following charts is the Internal Revenue Service, ("Individual Income Tax Returns with Positive Adjusted Gross Income (AGI) Returns Classified by Tax Percentile – Early Release").

Table 1

Summary of Federal Income Tax Data, 2009

Number of Returns with Positive AGI 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 137,982,203 $7,825,389 $865,863 100.0% 100.0% – 11.06% Top 1% 1,379,822 $1,324,572 $318,043 16.9% 36.7% $343,927.00 24.01% 1-5% 5,519,288 $1,157,918 $189,864 14.8% 22.0% 16.40% Top 5% 6,899,110 $2,482,490 $507,907 31.7% 58.7% $154,643.00 20.46% 5-10% 6,899,110 $897,241 $102,249 11.5% 11.8% 11.40% Top 10% 13,798,220 $3,379,731 $610,156 43.2% 70.5% $112,124.00 18.05% 10-25% 20,697,331 $1,770,140 $145,747 22.6% 17.0% 8.23% Top 25% 34,495,551 $5,149,871 $755,903 65.8% 87.3% $ 66,193.00 14.68% 25-50% 34,495,551 $1,620,303 $90,449 20.7% 11.0% 5.58% Top 50% 68,991,102 $6,770,174 $846,352 86.5% 97.7% > $32,396 12.50% Bottom 50% 68,991,102 $1,055,215 $19,511 13.5% 2.3% < $32,396 1.85%

Source: Internal Revenue Service

Table 2

Number of Federal Individual Income Tax Returns Filed 1980-2009 (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 2001 128,817 129 1,288 6,441 6,441 12,882 19,323 32,204 32,204 64,409 64,409 2002 128,324 128 1,283 6,416 6,416 12,832 19,249 32,081 32,081 64,162 64,162 2003 128,610 129 1,286 6,430 6,430 12,861 19,291 32,152 32,152 64,305 64,305 2004 130,371 130 1,304 6,519 6,519 13,037 19,556 32,593 32,593 65,186 65,186 2005 132,612 133 1,326 6,631 6,631 13,261 19,892 33,153 33,153 66,306 66,306 2006 135,719 136 1,357 6,786 6,786 13,572 20,358 33,930 33,930 67,860 67,860 2007 141,071 141 1,411 7,054 7,054 14,107 21,161 35,268 35,268 70,535 70,535 2008 139,961 140 1,400 6,998 6,998 13,996 20,994 34,990 34,990 69,980 69,980 2009 137,982 138 1,380 6,899 6,899 13,798 20,698 34,496 34,495 68,991 68,991

Source: Internal Revenue Service

Table 3

Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980-2009 ($ 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 2001 $6,241 $506 $1,094 $1,996 $694 $2,691 $1,380 $4,071 $1,308 $5,379 $862 2002 $6,114 $432 $986 $1,868 $686 $2,553 $1,382 $3,936 $1,309 $5,244 $870 2003 $6,288 $476 $1,055 $1,961 $703 $2,663 $1,415 $4,078 $1,330 $5,408 $880 2004 $6,875 $629 $1,306 $2,300 $750 $3,049 $1,497 $4,546 $1,406 $5,953 $922 2005 $7,508 $799 $1,592 $2,684 $803 $3,487 $1,582 $5,069 $1,475 $6,545 $963 2006 $8,122 $911 $1,792 $2,978 $865 $3,843 $1,693 $5,536 $1,570 $7,106 $1,016 2007 $8,799 $1,049 $2,008 $3,295 $933 $4,228 $1,818 $6,045 $1,675 $7,720 $1,078 2008 $8,427 $839 $1,685 $2,927 $930 $3,856 $1,822 $5,678 $1,674 $7,352 $1,075 2009 $7,825 $610 $1,326 $2,482 $898 $3,380 $1,770 $5,150 $1,620 $6,770 $1,055

Source: Internal Revenue Service

Table 4

Total Income Tax after Credits, 1980-2009 ($ 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 2001 $888 $143 $301 $473 $103 $576 $160 $736 $117 $853 $35 2002 $797 $123 $269 $429 $95 $524 $145 $669 $100 $769 $28 2003 $748 $117 $256 $407 $86 $492 $135 $627 $95 $722 $26 2004 $832 $145 $307 $475 $92 $567 $139 $706 $99 $804 $27 2005 $935 $180 $368 $558 $99 $657 $147 $804 $102 $906 $29 2006 $1,024 $200 $408 $616 $109 $725 $158 $883 $110 $993 $31 2007 $1,116 $225 $451 $676 $118 $794 $171 $966 $117 $1,083 $32 2008 $1,032 $190 $392 $606 $116 $721 $169 $891 $113 $1,004 $28 2009 $866 $148 $318 $508 $102 $610 $146 $756 $90 $846 $20

Source: Internal Revenue Service

Table 5

Adjusted Gross Income Shares, 1980-2009 (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% 2001 100% 8.10% 17.53% 31.99% 11.12% 43.11% 22.12% 65.23% 20.96% 86.19% 13.81% 2002 100% 7.06% 16.12% 30.55% 11.22% 41.77% 22.61% 64.37% 21.40% 85.77% 14.23% 2003 100% 7.57% 16.77% 31.18% 11.18% 42.36% 22.50% 64.86% 21.15% 86.01% 13.99% 2004 100% 9.14% 19.00% 33.45% 10.90% 44.35% 21.78% 66.13% 20.46% 86.58% 13.42% 2005 100% 10.65% 21.20% 35.75% 10.70% 46.44% 21.08% 67.52% 19.65% 87.17% 12.83% 2006 100% 11.22% 22.06% 36.66% 10.66% 47.32% 20.84% 68.16% 19.33% 87.49% 12.51% 2007 100% 11.93% 22.83% 37.44% 10.61% 48.05% 20.66% 68.71% 19.04% 87.74% 12.26% 2008 100% 9.96% 20.00% 34.73% 11.03% 45.77% 21.62% 67.38% 19.86% 87.25% 12.75% 2009 100% 7.80% 16.93% 31.72% 11.47% 43.19% 22.62% 65.81% 20.71% 86.52% 13.4800%

Source: Internal Revenue Service

Table 6

Total Income Tax Shares, 1980-2009 (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% 2001 100% 16.06% 33.89% 53.25% 11.64% 64.89% 18.01% 82.90% 13.13% 96.03% 3.97% 2002 100% 15.43% 33.71% 53.80% 11.94% 65.73% 18.16% 83.90% 12.60% 96.50% 3.50% 2003 100% 15.68% 34.27% 54.36% 11.48% 65.84% 18.04% 83.88% 12.65% 96.54% 3.46% 2004 100% 17.44% 36.89% 57.13% 11.07% 68.19% 16.67% 84.86% 11.85% 96.70% 3.30% 2005 100% 19.26% 39.38% 59.67% 10.63% 70.30% 15.69% 85.99% 10.94% 96.93% 3.07% 2006 100% 19.56% 39.89% 60.14% 10.65% 70.79% 15.47% 86.27% 10.75% 97.01% 2.99% 2007 100% 20.19% 40.41% 60.61% 10.59% 71.20% 15.37% 86.57% 10.54% 97.11% 2.89% 2008 100% 18.47% 38.02% 58.72% 11.22% 69.94% 16.40% 86.34% 10.96% 97.30% 2.70% 2009 100% 17.11% 36.73% 58.66% 11.81% 70.47% 16.83% 87.30% 10.45% 97.75% 2.25%

Source: Internal Revenue Service

Table 7

Dollar Cut-Off, 1980-2009 (Minimum AGI for tax return to fall into various percentiles; Thresholds not adjusted for inflation)

Year Total Top 0.1% Top 1% Top 5% Top 10% Top 25% Top 50% 1980 0 $80,580 $43,792 $35,070 $23,606 $12,936 1981 0 $85,428 $47,845 $38,283 $25,655 $14,000 1982 0 $89,388 $49,284 $39,676 $27,027 $14,539 1983 0 $93,512 $51,553 $41,222 $27,827 $15,044 1984 0 $100,889 $55,423 $43,956 $29,360 $15,998 1985 0 $108,134 $58,883 $46,322 $30,928 $16,688 1986 0 $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 0 $139,289 $68,414 $52,921 $33,983 $17,768 1988 0 $157,136 $72,735 $55,437 $35,398 $18,367 1989 0 $163,869 $76,933 $58,263 $36,839 $18,993 1990 0 $167,421 $79,064 $60,287 $38,080 $19,767 1991 0 $170,139 $81,720 $61,944 $38,929 $20,097 1992 0 $181,904 $85,103 $64,457 $40,378 $20,803 1993 0 $185,715 $87,386 $66,077 $41,210 $21,179 1994 0 $195,726 $91,226 $68,753 $42,742 $21,802 1995 0 $209,406 $96,221 $72,094 $44,207 $22,344 1996 0 $227,546 $101,141 $74,986 $45,757 $23,174 1997 0 $250,736 $108,048 $79,212 $48,173 $24,393 1998 0 $269,496 $114,729 $83,220 $50,607 $25,491 1999 0 $293,415 $120,846 $87,682 $52,965 $26,415 2000 0 $313,469 $128,336 $92,144 $55,225 $27,682 2001 0 $1,324,487 $292,913 $127,904 $92,754 $56,085 $28,528 2002 0 $1,191,673 $285,424 $126,525 $92,663 $56,401 $28,654 2003 0 $1,262,760 $295,495 $130,080 $94,891 $57,343 $29,019 2004 0 $1,548,941 $328,049 $137,056 $99,112 $60,041 $30,122 2005 0 $1,848,791 $364,657 $145,283 $103,912 $62,068 $30,881 2006 0 $2,044,689 $388,806 $153,542 $108,904 $64,702 $31,987 2007 0 $2,155,365 $410,096 $160,041 $113,018 $66,532 $32,879 2008 0 $1,803,585 $380,354 $159,619 $113,799 $67,280 $33,048 2009 0 $1,432,890 $343,927 $154,643 $112,124 $66,193 $32,396

Source: Internal Revenue Service

Table 8

Average Tax Rate, 1980-2009 (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% 2001 14.23% 28.20% 27.50% 23.68% 14.89% 21.41% 11.58% 18.08% 8.91% 15.85% 4.09% 2002 13.03% 28.49% 27.25% 22.95% 13.87% 20.51% 10.47% 16.99% 7.67% 14.66% 3.21% 2003 11.90% 24.64% 24.31% 20.74% 12.22% 18.49% 9.54% 15.38% 7.12% 13.35% 2.95% 2004 12.10% 23.09% 23.49% 20.67% 12.28% 18.60% 9.26% 15.53% 7.01% 13.51% 2.97% 2005 12.45% 22.52% 23.13% 20.78% 12.37% 18.84% 9.27% 15.86% 6.93% 13.84% 2.98% 2006 12.60% 21.98% 22.79% 20.68% 12.60% 18.86% 9.36% 15.95% 7.01% 13.98% 3.01% 2007 12.68% 21.46% 22.45% 20.53% 12.66% 18.79% 9.43% 15.98% 7.01% 14.03% 2.99% 2008 12.24% 22.70% 23.27% 20.70% 12.44% 18.71% 9.29% 15.68% 6.75% 13.65% 2.59% 2009 11.06% 24.28% 24.01% 20.46% 11.36% 18.05% 8.25% 14.68% 5.56% 12.50% 1.85%

Source: Internal Revenue Service

Some important facts to keep in mind about the information provided on this page.

(1) All tax returns that have a positive AGI are included, even those that do not have a positive income tax liability.

(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. Some dependent returns are included in the figures here, 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 were taken from data that were labeled an "early release" by SOI in October 2011. The 2008 figures and those for previous years on this page were taken from the final percentile data released by the IRS. Figures for 2009 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] See, for example, http://news.salon.com/2010/09/28/us_census_recession_s_impact_1/.

[2] Andrew Chamberlain and Gerald Prante, Tax Foundation Working Paper 1, "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991 – 2004," http://www.taxfoundation.org/files/wp1.pdf.