FY2009 data is finally in! FY2010 can’t be final since the due date is tomorrow for personal extensions.
Starting with the bottom 50% of federal tax filers! They paid in 2.25% of the total federal income tax bill. This is the group that gets the EIC. Their average tax rate was 12.5% of their AGI.
Now to the top 1% of all filers paid 36.7% of all federal income taxes. That’s down from 38% the previous year. 2009 was a bad year for everyone. This exclusive group of taxpayers reported 16.9% of total adjusted gross income, which was down from a 20% share in 2008. To reach this stratosphere of the top 1% of earners in 2009, you needed an adjusted gross income of at least $343,927. The average tax rate paid by the top 1% of filers rose to 24.0% of their AGI, the highest rate since 2003.
The top 5% of all taxpayers paid 58.7% of total income tax and accounted for 31.7% of all adjusted gross income. They each had AGIs of at least $154,643.
The top 10% of filers, those with AGIs of $112,124 or more, bore 70.5% of the total tax burden bringing in slightly more than 43% of the total adjusted gross income.
So to be in the top 10% of all taxpayers you can have a couple each making $60,000, mortgaged to the hilt with 2 kids living paycheck to paycheck. Living the “American Dream”. Remember $100,000 of AGI the IRS considers you to be the affluent.
This reminds me of the joke “Bar Stool Economics” by David R. Kamerschen, Ph.D. Professor of Economics, University of Georgia which follows this post.