Top 1% Pay More Taxes Than The Bottom 90%
According to an analysis by the Tax Foundation, based on recently released data from the Internal Revenue Service for 2005 (see chart above, click to enlarge):
The top-earning 25% of taxpayers -- those with an Adjusted Gross Income (AGI) over $62,068 -- earned 67.5% of the nation's income, but they paid 86% of taxes collected.
The top 1% of taxpayers (AGI over $364,657) earned about 21% of the nation's income, yet paid more than 39% of all federal income taxes collected.
That means the top 1% paid about the same amount of federal individual income taxes as the bottom 95 percent, and the top 5% paid more (about 60% of all taxes collected) than the bottom 95% (about 40% of all taxes).
The IRS data also shows increases in individual incomes across all income groups:
Just as the highest earners lost the biggest percentage of their incomes during the recession of 2001, so they have prospered the most as the economy has continued to rebound.
Between 2000 and 2005, pre-tax income for the top 1% group grew by 19.1%, and the pre-tax income for the bottom 50% increased by 15.5% during the same period.
This pattern of income loss and growth at the top of the income spectrum is the same during every recession and recovery, says the Foundation. The net result has also been a sharp rise in federal government tax revenue from 2003-2005 compared to previous years.
Note: The top 1% paid 35.7% of all income taxes in 2004, and 39.38% of all income taxes in 2005, suggesting the "rich" now pay more as share of all income taxes than before and the tax burden on the rich has increased. Weren't the income tax cuts of 2003 supposed to be "tax cuts for the rich?"