Who Pays Taxes, 2013-2015 Numbers

I haven't touched on this in a while, and I am continually frustrated by the IRS data being so many years behind. Here's where I got the data.

Here we go:

It's hard to read, but let's focus on the last lines and do some math, as they report this information the exact opposite of how we want to see it.

In 2013:

The bottom half of wage earners account for 11.49% of the total AGI in the country and paid 2.78% of the total income taxes.  Flip that and the top half paid 97.22% of the taxes.

The top 25% reported 68.1% of the AGI and paid 86.27% of the income taxes.

The top 10% reported 45.87% of the AGI and paid 69.8% of the income taxes.

The top 1% earned 19.04% of the AGI and paid 47.8% of the total income taxes.

I'm not rich, but I think there's no argument that "the rich" aren't paying their fair share of the taxes.


**** i found up to 2015, and it appears that the top 1% is paying more...

As you can see, the last column of the Total income tax share is trending downward, meaning that the top 1% must be increasing, paralleling the change in their portion of the AGI. 

More Evidence For Small Government

Just a quick post today as I ponder the bloated mass that is our health care economy....

Got an email at work about my HRA (not FSA or HSA or...you get my point here, right? TOO MANY TYPES OF ACCOUNTS) and in trying to figure out what the "HRA Wellness Credit" was as opposed to the HRA itself, I poked around to determine what I can use the money on.

There is, of course, a site to help you know what is eligible and what is not. It's a very detailed, user-friendly site, in fact, I give it high marks for interface and use. The only reason that such a site is necessary, of course, is because of the aforementioned bloated mass that is American Health Insurance and Care, Inc. That's right, folks, because the US Gov't has a hand in all of this, there are strings attached to the $$ that your company GIVES YOU or that you have WITHHELD FROM YOUR PAY expressly for the purpose of offsetting uncovered medical costs.

Chard Snyder has a handy site to help you spend your FSA (and HRA?) dollars, in fact. Of course they do, why in the world would they miss out on this opportunity to keep the dollars that they manage for you? Seriously, they would be stupid not to!

I am trying to point out that all of this economic activity (building websites to help wade through the ridiculous restrictions on what you can spend health care dollars on, companies existing to manage your HRAs, FSAs, etc.) is only necessary because the Federal Gov't is so thoroughly enmeshed into what should be an independent sector of the economy. Ridiculous.

I tell you, this thought has roots in an old realization when working for a small family business that they had to waste money employing an accountant and payroll service because of the morass of taxes imposed by the federal government and the requirement to withhold payroll taxes rather than a much simpler (for the business) idea that I, the earner, am responsible for paying my quarterly income taxes and must therefore save a portion of my income and write that painful check a few times a year. These businesses are essentially forced to do the work (and pay for the privilege) of the IRS. Ridiculous.

Imagine the tax revolt we would have if there was no such thing as withholding?

Who Pays Taxes In The United States

So, a lunchtime conversation about stuff led me to re-researching these numbers.

According to Tax Foundation: 

http://taxfoundation.org/article/summary-latest-federal-income-tax-data

In 2011, the top 10 percent of taxpayers 

(with AGIs above $120,000) accounted for 45.4 percent of all AGI and 68.3 percent of all income taxes paid.

Taxpayers in the top 5 percent accounted for 33.9 percent of all AGI and 56.5 percent of all income taxes paid.

The top 1 percent of all taxpayers accounted for 18.7 percent of all AGI and 35.1 percent of all income taxes paid.

A more Democrat leaning group puts it this way: 

http://www.cbpp.org/cms/?fa=view&id=3505 

In fact, when all taxes (state, local, excise) are considered, the share of taxes that each fifth of households pays is similar to its share of the nation’s total income.[22]  

ITEP data show that in 2011,

the bottom fifth of households received 3.4 percent of the total income in the nation and paid 2.1 percent of the total taxes. 

The middle fifth of households received 11.4 percent of income and paid 10.3 percent of taxes. 

The top 1 percent of households received 21.0 percent of income and paid 21.6 percent of taxes.  The tax system as a whole is only mildly progressive.[23]

(don't you like how they use "received" instead of "earned?")

In brief, from the IRS itself: http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Income-Tax-Rates-and-Tax-Shares#_article 

This is from Table 7, near the bottom of the page. It's not apples to apples to the numbers above, as it's using something called "1979 Income Concept" Income Excluding Dependents (Finding this info is a nightmare, so go for it if you don't believe me).

Total income tax share (percentage):	Total	Top 1 percent	Top 5 percent	Top 10 percent	Top 25 percent	Top 50 percent
2010	100.00	35.93	57.89	69.76	86.51	97.47
Income share (percentage):	Total	Top 1 percent	Top 5 percent	Top 10 percent	Top 25 percent	Top 50 percent
2010	100.00	20.10	35.94	47.33	69.00	88.57

More fully,

Descending cumulative percentiles Total Top 1 percent Top 5 percent Top 10 percent Top 25 percent Top 50 percent Income floor on percentiles (current dollars):     2001 N/A 338,608 136,580 97,538 58,195 31,185     2002 N/A 328,275 136,465 97,466 58,491 31,065     2003 N/A 340,175 138,852 99,177 59,298 31,207     2004 N/A 377,837 147,206 104,106 61,878 32,284     2005 N/A 418,709 157,306 109,543 63,929 33,035     2006 N/A 452,917 167,342 114,981 66,401 33,971     2007 N/A 479,542 174,409 119,564 68,487 34,989     2008 N/A 444,522 171,470 119,542 68,594 34,754     2009 N/A 394,632 163,619 115,951 66,785 33,573     2010 N/A 424,734 169,181 118,957 67,412 33,800 Income floor on percentiles (constant dollars): [1]     2001 N/A 249,895 100,797 71,984 42,948 23,015     2002 N/A 238,572 99,175 70,833 42,508 22,576     2003 N/A 241,602 98,616 70,438 42,115 22,164     2004 N/A 261,479 101,873 72,046 42,822 22,342     2005 N/A 280,260 105,292 73,322 42,790 22,112     2006 N/A 293,720 108,523 74,566 43,062 22,030     2007 N/A 302,359 109,968 75,387 43,182 22,061     2008 N/A 269,898 104,111 72,582 41,648 21,101     2009 N/A 240,483 99,707 70,659 40,698 20,459     2010 N/A 254,637 101,427 71,317 40,415 20,264 Total income tax (millions of dollars):  [2] Total Top 1 percent Top 5 percent Top 10 percent Top 25 percent Top 50 percent     2001 884,931 284,927 455,272 557,726 717,266 840,233     2002 794,282 253,551 411,671 507,083 652,529 759,423     2003 745,514 242,869 392,561 478,771 613,326 713,728     2004 829,096 290,915 459,555 552,298 691,364 795,814     2005 931,693 352,361 540,674 640,865 788,316 896,842     2006 1,020,438 389,673 596,816 707,802 867,486 983,924     2007 1,111,872 429,288 654,793 774,831 947,875 1,072,649     2008 1,028,669 371,962 586,042 703,879 874,955 995,045     2009 863,486 301,881 492,834 595,962 743,117 840,401     2010 949,144 341,053 549,474 662,135 821,104 925,107 Average tax rate (percentage): [3] Total Top 1 percent Top 5 percent Top 10 percent Top 25 percent Top 50 percent     2001 14.20 25.29 22.14 20.38 17.64 15.71     2002 12.96 24.63 21.14 19.29 16.44 14.46     2003 11.84 22.18 19.28 17.51 14.93 13.18     2004 12.01 21.50 19.20 17.57 15.02 13.30     2005 12.33 21.43 19.32 17.78 15.31 13.59     2006 12.43 20.89 19.01 17.63 15.29 13.64     2007 12.54 20.65 18.94 17.61 15.35 13.73     2008 12.21 21.02 18.94 17.46 15.05 13.36     2009 11.15 21.43 18.74 16.88 14.11 12.28     2010 11.46 20.49 18.46 16.89 14.37 12.61 Income share (percentage): Total Top 1 percent Top 5 percent Top 10 percent Top 25 percent Top 50 percent     2001 100.00 18.07 32.98 43.90 65.23 85.79     2002 100.00 16.80 31.77 42.90 64.75 85.73     2003 100.00 17.39 32.33 43.43 65.27 86.03     2004 100.00 19.61 34.69 45.56 66.70 86.71     2005 100.00 21.76 37.04 47.71 68.16 87.32     2006 100.00 22.73 38.24 48.91 69.13 87.89     2007 100.00 23.45 38.99 49.61 69.67 88.13     2008 100.00 21.01 36.72 47.83 69.00 88.41     2009 100.00 18.20 33.97 45.60 68.00 88.39     2010 100.00 20.10 35.94 47.33 69.00 88.57 Total income tax share (percentage): Total Top 1 percent Top 5 percent Top 10 percent Top 25 percent Top 50 percent     2001 100.00 32.20 51.45 63.02 81.05 94.95     2002 100.00 31.92 51.83 63.84 82.15 95.61     2003 100.00 32.58 52.66 64.22 82.27 95.74     2004 100.00 35.09 55.43 66.61 83.39 95.99     2005 100.00 37.82 58.03 68.78 84.61 96.26     2006 100.00 38.19 58.49 69.36 85.01 96.42     2007 100.00 38.61 58.89 69.69 85.25 96.47     2008 100.00 36.16 56.97 68.43 85.06 96.73     2009 100.00 34.96 57.08 69.02 86.06 97.33     2010 100.00 35.93 57.89 69.76 86.51 97.47 Or, in a sentence, in 2010: the top 1% earned 20.10% of the income and paid 35.93% of the taxes, the top 5% earned 35.94% of the income and paid 57.89% of the taxes, the top 10% earned 47.33% of the income and paid 69.76% of the taxes, the top 25% earned 69% of the income and paid 86.51% of the taxes, and the top 50% earned 88.57% of the income and paid 97.47% of the taxes.