Thursday, February 18, 2010

Top 400 Taxpayers Paid 2% of All Income Taxes

According to new data from the IRS, the top 400 individual income taxpayers in 2007 (out of 143 million taxpayers) earned 1.59% of all Adjusted Gross Income in that year, and paid 2.05% of all individual income taxes collected (see chart).

Isn't it amazing that only 400 taxpayers out of 143 million total tax filers paid more than 2% of all income taxes collected?

More on this later.

22 Comments:

At 2/18/2010 6:15 PM, Anonymous Stephen said...

Not really that amazing considering the amount of income reported. The ratio of percent of income taxes paid to percent of total income earned is 1.29, not out of line with a progressive taxation system.

 
At 2/18/2010 7:13 PM, Blogger Walt G. said...

It would be interesting to see what the gross income of the top 400 taxpayers was before it was adjusted, and how that percentage of what I assume would be deductions compares to the median taxpayer. Are those data available somewhere?

Even though I am interested in the actual gross income of that group, I don't buy into the "soak the rich" mentality. The problem is that the govenment spends too much of taxpayers' money and not that they don't have enough money.

 
At 2/18/2010 8:48 PM, Blogger OA said...

Most of the income is capital gains followed by partnership/S corp. income, so likely the following years will show a decline in the average. And I'd expect that many who can, will pull their income and gains forward before the Bush tax cuts expire and any new tax surcharges come into play.

What's really surprising is that 7 people were in the top 400 in each of the 16 years from 1992 through 2007. That's a lot of income to have on a sustained basis.

 
At 2/18/2010 9:33 PM, Blogger bobble said...

its not because they're overtaxed:

"Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992 . . " Buisness Week

 
At 2/18/2010 9:55 PM, Blogger randian said...

Why is the ratio of tax to income so low for this group? It's a lot higher than 1.29 for the general "upper 1%" group.

 
At 2/18/2010 11:05 PM, Anonymous Benny "Tell It LIke It Is Man" Cole said...

Back in the 1950s and 1960s, under Eisenhower, JFK, LBJ and very conservative Republican and Democratic (Southern, largely) Congressional leadership, the top federal tax rate topped 90 percent, the federal debt as fraction of GDP was declining sharply, inflation was low, and economic growth superb.

We simply are not serious about paying down the debt anymore.

The top 400 taxpayers barely pay more in income taxes than Joe Schmoe anymore, as a percent of income.

Jeez, when you consider than people under $100k in income usually pay 7 percent Social Security taxes on every dollar earned, these figures actually suggest a regressive federal tax system. Add another 7 percent in employer taxes in Social Security.

I actually like the flat tax idea--if we move Social Security and Medicare under the flat tax. That is, a single flat federal tax on all income, plus a real whack at income of more than $10 million a year.

 
At 2/19/2010 12:15 AM, Anonymous Mike C said...

More amazing that 400 taxpayers earned that percent of total income or like $1.5M. Their compensation was 50 times the average American and their marginal tax rate was 1.6 times the average American. Would they wealthy 400 prefer to trade places with an average wage earner? Probably not. Much is given, much is expected.

 
At 2/19/2010 12:49 AM, Blogger OA said...

randian said...

Why is the ratio of tax to income so low for this group? It's a lot higher than 1.29 for the general "upper 1%" group.

If you look at the source data, most of the income is capital gains.

 
At 2/19/2010 12:56 AM, Anonymous Anonymous said...

Much is given, much is expected.

Much is given? By whom, you? Chances are that these people not only paid a disproportionate share of the taxes, but also created a disproportionate share of the jobs. How many jobs did you create Mike? Benny? booble? If anyone has been "given" anything it's those in the bottom 40+ percent who pay no federal taxes at all.

 
At 2/19/2010 4:40 AM, Anonymous niknaknoo said...

Where do you think the top 400 taxpayers get their money from? Everybody else of course!

 
At 2/19/2010 7:44 AM, Blogger juandos said...

"Where do you think the top 400 taxpayers get their money from? Everybody else of course!"...

And you know this how niknaknoo?

None of the top 400 might have made some of their money from overseas sales or investment?

Interesting how the top 400 have MORE money extorted from them to pay for the socialist programs the bobbles, the pseudo bennys and others of their ilk seem to think they can't live without...

 
At 2/19/2010 8:07 AM, Blogger Xavier Onassis said...

The problem is that the govenment spends too much of taxpayers' money and not that they don't have enough money.

What Walt said.

Where do you think the top 400 taxpayers get their money from? Everybody else of course!

Exactly. But we (everybody else) got something in exchange for that money. AND, we paid taxes on the money before we gave it to them. Man, those guvment folks are pretty slick...what a scam.

 
At 2/19/2010 8:26 AM, Anonymous DrTorch said...

"Much is given"?

Really? Maybe you should look up the definition of "earned."

And like anonymous said, how many jobs did these folks create?

 
At 2/19/2010 9:27 AM, Anonymous morganovich said...

nickanoo-

you have that totally backwards.

where did these people get their money? by doing something or producing something that other people found valuable enough to spend a lot of money on. how terrible and exploitative of them to provide goods and services that people want.

you need to get over this zero sum fallacy that somehow there is always a certain a amount of wealth and the fact that some people have more means they are hogging it.

it doesn't work like that. if these folks weren't doing what they were doing and producing wealth and jobs and goods, we'd all be worse off.

you should be thanking them, not blaming them.

wealth doesn't come from some fountain somewhere. someone has to create it.

 
At 2/19/2010 10:16 AM, Anonymous uBig fatPig said...

How many of top 400 were lobbyists
?

 
At 2/19/2010 11:00 AM, Anonymous Lyle said...

To answer uBigFatPig, the answer is likely none, these are the people that hire the lobbyists, not the lobbyists. Lobbyists make good money but not in this class.

 
At 2/19/2010 11:53 AM, Anonymous Anonymous said...

Isn't it amazing that 329 of these 400 taxpayers paid a total effective federal tax rate of 25 percent or less in 2007?

by doing something or producing something that other people found valuable enough to spend a lot of money on

haha, the last few years have really shown that they are quite possibly doing nothing of the sort (i.e. finance and real estate industries)

 
At 2/19/2010 4:59 PM, Anonymous TwinBeam said...

From the source data - the after inflation adjusted gross income of the non-top-400 (which includes a lot of very rich folks) increased an average of about 1.25x per taxpayer from 1992 to 2007.

The top 400 increased their AGI 5x in the same period.

In that same period that their AGI somehow grew 4x faster than the rest of us, their share of taxes grew only 2x.

So fine - let's not "soak the rich". But I'd say they've pretty clearly been soaking the rest of us, in both the share of income and share of taxes!

 
At 2/19/2010 8:08 PM, Blogger juandos said...

"The top 400 increased their AGI 5x in the same period.

In that same period that their AGI somehow grew 4x faster than the rest of us, their share of taxes grew only 2x
"...

The real question TwinBeam is why should ANY of these 400 pay even one more penny in taxes than you?

Why should successful people be punished via the socialist 'progressive' tax racket for their success?

 
At 2/19/2010 10:41 PM, Anonymous Anonymous said...

Every time Congress raises the top rate they create a hundred new loopholes so the top rate never gets paid. It is a game politicians play to jerk the masses around.

 
At 2/20/2010 8:00 AM, Blogger juandos said...

"Every time Congress raises the top rate they create a hundred new loopholes so the top rate never gets paid"...

Really?

Got something credible on that?

You know that reasoning does sound more than a bit plausible...

 
At 2/20/2010 8:12 AM, Anonymous uBig fatPig said...

"
these are the people that hire the lobbyists,
"
~~Lyle~

I rest my case
!

http://www.tax.com/taxcom/features.nsf/Articles/0DEC0EAA7E4D7A2B852576CD00714692?OpenDocument

 

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