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1 Gerald Prante & Mark Robyn, Summary of Latest Federal Individual Income Tax Data 1 (2010)

handle is hein.taxfoundation/ffcejxz0001 and id is 1 raw text is: October6. 2010 \. ,.\. .. No. 249......... .. \% I . .L Summary of Latest Federal Individual Income Tax Data By Gerald Prante and Mark Robyn The Internal Revenue Service has released new data on individual income taxes, reporting on calendar year 2008, a year of economic recession in which the world's financial system was temporarily in a perilous state. The amount of individual income taxes paid fell substantially in 2008, by $84 billion, and nationally, average income tax rates were at their lowest levels since 2004. The average tax rate for returns with a positive liability went from 12.68 percent in 2007 to 12.24 percent in 2008. As the data below show, incomes reported by tax returns at the high end of the income spectrum plummeted from 2007 to 2008, as did their share of the nation's income and income taxes paid. In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income, compared to 2007 when those figures were 40.4 percent and 22.8 percent, respectively. Both of those figures -- share of income and share of taxes paid -- were their lowest since 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes. Each year from 2005 to 2007, the top 1 percent's constantly growing share of income earned and taxes paid set a record. That trend reversed in 2008. In fact, the income share for the top 1 percent of tax returns was lower in 2008 than in 2000, largely due to differences in capital gains. Another indicator of this reversal in the income and tax shares of the top 1 percent is that during 2007, the top 1 percent had actually paid more in federal income tax than the bottom 95 percent, a comparison that was much remarked on a year ago. But the diminished income of the top 1 percent in 2008 means that the comparison no longer holds. During 2008, the bottom 95 percent (AGI under $159,619) paid 41.3 percent of the total collected, a larger share than the 38.0 percent paid by the top 1 percent (AGI over $380,354). The top-earning 5 percent of taxpayers (AGI over $159,619), however, still paid far more than the bottom 95 percent. The top 5 percent earned 34.7 percent of the nation's adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes. m uh remarked on a yea ago , .. But the dish income of the t o I per,, i n 2 0 e a ns thatt.e

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