Find Out Here How YOU Rank as a Taxpayer!
By LC on Nov 29, 2007 in Personal Finance
The latest statistics show a growing income gap between rich and poor and a far wider gap between the tax burden carried by different economic classes. Where do you stand as a money maker and a taxpayer? Find out by reading on!
New data show that an income of $30,881 or more puts you in the top half of the class. Earning about twice that much — $62,068 — earns you a spot among the top 25% of all wage earners. You crack the elite top 10% if you earn more than $103,912.
And $364,657 buys top bragging rights: Earn that much or more and you’re among the top 1% of all American earners. Together, the top 1% earn a full 21% of the income
reported to the IRS — far more than the 13% of total income reported by the bottom 50% of earners.
Here’s another powerful statistic about the top 1% of earners: They pay a whopping 39% of all federal income taxes. The bottom 50% pay just 3% of all income taxes.
These statistics come from just-released data based on 2005 tax returns and do not distinguish between single and joint returns. (Note that these figures focus on income taxes and do not include Social Security taxes. Lower-earning taxpayers pay a far higher percentage of their income in Social Security taxes than do higher-earning taxpayers.)
The following table shows the income categories, the percentage of income earned by earners in that category and tax burden carried by members of that category.
|
BREAKDOWN OF INCOME AND TAXES PAID BY CATEGORY |
|||
|
Income Category |
2005 AGI |
Percent of all income |
Percent of income taxes paid |
|
Top 1% |
Over $364,657 |
21% |
39% |
|
Top 5% |
Over $145,283 |
36% |
60% |
|
Top 10% |
Over $103,912 |
46% |
70% |
|
Top 25% |
Over $62,068 |
68% |
86% |
|
Top 50% |
Over $30,881 |
87% |
97% |
|
Bottom 50% |
Under $30,882 |
13% |
3% |
Source: IRS
On Nov 7, 2007, LC said:
By email from Brian in Sacramento, CA
Actually, the 2006 tax returns were even worse.
My understanding is that we are now past the 50% threshold — half the population pays no federal income tax. If you think about the long term consequences of that w.r.t. tax reform, it’s pretty scary.
The one plus side is that the 50% who doesn’t pay taxes is also the least likely to vote. So there’s still hope for the productive members of society to take back our government.