After I posted this chart yesterday, I was asked by many of you what share of income each income group was making. I added that data to yesterday’s chart.
As you can see, the top 1 percent of earners shoulder 38 percent of the personal federal income taxes and make only 20 percent of income. The top 5 percent of income earners pay almost 60 percent of income taxes and make almost 35 percent of all personal income.
Here are some other data points that I find interesting:
Of the top 1 percent of income earners, only 23 percent are millionaires.
A household income above $380,000 puts you in the top 1 percent of income earners.
Of the top 10 percent of income earners, only 2 percent are millionaires.
A household income above $114,000 puts you in the top 10 percent of income earners. That means that a cop making $60K married to a teacher making $60K make it into the top 10 percent.
Please send other suggestions for charts and data. I appreciate your input.
The category "federal personal income tax" is artificially distinguished from the payroll tax. Both these taxes are taxes on income. All this income goes to D.C. and is spent. And know, I don't have any "account" in D.C. with my name on it. And if I do, then every conservative critique of Social Security I've ever heard--and as a conservative, I've repeated myself--is grossly misleading.
Reply to this commentLinkReport AbuseGreat charts. Thanks! My concern is that those on the left would point out the great difference in those last two green bars. To the effect of "Oh the humanity, the top half make 87% of the income and the bottom half is left with a mere 13%." Is there a breakdown of who comprises the bottom half that deflects this criticism? For example, are those in the bottom half predominantly made up of students/young people, disabled/non-workers, etc? What is the income level you need to reach to get to the top half? Thanks and keep up the good work.
Reply to this commentLinkReport AbuseGreat chart!
Reply to this commentLinkReport AbuseI'd love to see the same chart with total tax burden instead of federal personal income tax.
Reply to this commentLinkReport AbuseCould you show a similar chart of percentage of personal income tax plus fica tax by income percentage? Thanks.
Reply to this commentLinkReport AbuseCould you break down the top 1% as:
under 1M
over 1M
over 10M
over 100M
Also, there is no longer a way to click to your email address from NRO. There used to be a link to the Mercator Center (i think).
Reply to this commentLinkReport AbuseI would be interested to see the segments broken out in progression ..
Top 1% (as is)
Top 2-5% (If my math is right ... I think this would be 28.7% of taxes and 14.7% of income)
Top 6-10% (11.2%; 12.1%)
Top 10-25%
Top 26-50%
Bottom 50%
Great Chart ... but I think if all the num,bers add up to 100%
Reply to this commentLinkReport AbuseShouldn't payroll taxes be included as well? They are taxes collected by the federal government and used explicitly for redistribution. They are also regressive taxes as they are capped. It would make the picture still appear progressive, but less so.
Reply to this commentLinkReport AbuseI can't tell you the number of liberals I have argued with who are absolutely convinced that the top 1% earn 80% or more of the income.
Just to shut up the wheenies, I would like to see another bar on taxes paid, that includes payroll taxes. And perhaps income should include govt transfer programs.
Reply to this commentLinkReport Abuse(Maybe that should be a new chart with those two graphs, just to keep the thing from getting too complicated.)
Excellent chart. It would be nice to see a similar chart that is not cumulative and includes the income ranges associated with each bracket.
Reply to this commentLinkReport AbuseSuggestion for a third data point (bar) for each percentile: average tax rate
Reply to this commentLinkReport AbuseI notice the percentages are cumulative. Could you show a chart that separates them out? So after the top 1%, there would be the 2-5%, the 6-10%, etc.
Great chart as is, though.
Reply to this commentLinkReport AbuseMark - I think that's because they're confusing income and wealth.
Reply to this commentLinkReport AbuseIs there enough data available to show something closer to total tax burden (payroll, state income, property, sales, etc) by the same groups? I imagine the numbers get a heck of a lot squishier by the time you wind in taxes that are not well tracked by income.
Sure would be nice if the payroll taxes were dumped into the income tax bucket for statistical and filing purposes - they're surely spent that way.
Reply to this commentLinkReport AbuseIt looks like this is limited to tax PAYERs as opposed to all households, which would include non-earners and EIC recipients. I'm guessing when those are included, the bottom 50% pays -0-.
Reply to this commentLinkReport AbuseVeronique said,
"Please send other suggestions for charts and data."
Make 535 copies (plus about 1k) and staple or nail them to the foreheads Members of Congress and the Administration officials. Repeat weekly.
Reply to this commentLinkReport AbuseVeronique, thanks so much for this chart.
It would probably be too much trouble, but I'd like to see the chart with rimfrel's suggestion (after the top 1%, there would be the 2-5%, the 6-10%, etc.) plus the number of taxpayers in each demographic.
We all appreciate your effort!
Reply to this commentLinkReport AbuseI'd like to see what this chart would look like if payroll taxes are included. While technically distinct from the income tax, in practice they are largely an extension of it.
Reply to this commentLinkReport AbuseI gather this chart is compiled from the 2008 tax return data, because these are the same percentages that are reflected on the Tax Foundation's web site reflecting that information.
In that case the 'income' figures used are adjustable gross income as defined by the tax code. I agree with Mark, and suggested the same in another column by Veronique. I think it would be extremely enlightening to use 'effective disposable income' instead. I would define that as AGI - all taxes paid (state income and sales, etc, as well as payroll) + all transfer payments received. I would include the employer's portion of payroll taxes and include Medicare and Social Security in transfer payments.
The data is probably impossible to come by in a form that exactly maps to the tax returns, but you could use proxies that come reasonably close. (Distribute state income taxes on the basis of fed income tax; Social Security benefits and other state taxes on a per-capita basis, for example). And of course some of the items are easy to assign. At least I hope all of the Medicaid, housing assistance and food stamp transfers are going to the bottom 50%.
I may take a stab at this if I have enough time on my hands.
Otherwise, Veronique please mention me in your Nobel acceptance speech.
Reply to this commentLinkReport AbuseBetter Graph: change from, or add second graph, showing total federal taxes not just income (just because FDR bogusly marketed SS etc as insurance, we all know its just taxes by another name). Adds honesty at the expense of making the case look less cut and dried.
Also, a graph of total tax burden (fed, state, local) compared with share of income would be nice.
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