Who Pays What?

With all the chatter about who is paying what in federal income taxes, wouldn’t it be nice to know what the IRS statistics say they collect? Here are the facts.

In a continuing effort to provide information as we listen to the budget and debt debates out of Washington D.C., outlined here are some IRS statistics on who pays individual income taxes. The information provided here is the most current available information.

Income % of Income Share of Income Tax Paid Average Tax Rate
Top 1% 18.9% 37.4% 23.4%
Top 5% 33.8% 59.1% 20.6%
Top 10% 45.2% 70.6% 18.5%
Top 25% 67.6% 87.1% 15.2%
Top 50% 88.3% 97.6% 13.0%
Bottom 50% 11.7% 2.4% 2.4%
All Taxpayers 100% 100% 11.8%

How to read:The top 10% of Adjusted Gross Income (AGI) on 2010 tax returns reported approximately 45.2% of the income and paid 70.6% of the total individual income tax collected in 2010.1

Observations:

Check The top 1% of income paid 37.4% of the federal individual income taxes with 18.9% of the reported income.
Check The largest gap between income representation and amount of tax paid is in the top 10%. The top 10% of reported income have approximately 45.2% of claimed income, and pay approximately 70.6% of the individual income taxes.
Check The Tax Policy Center estimates that 46.4% of households paid no federal income tax for 2011.

Note: The above figures net out “negative” income tax returns for those who filed a tax return, but due to adjustments and credits have negative adjusted gross income.

1 Source: Internal Revenue Service. SOI Bulletin Table 5 – Selected Income and Tax Items, Shares of Adjusted Gross Income and total income tax and average tax rates. All figures are based on estimates from sampling conducted by the Internal Revenue Service using 2011 tax filing data for 2010 taxes. Income means Adjusted Gross Income (AGI) as reported on individual income tax returns.

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