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1 Patrick Fleenor, Top Five Percent of Taxpayers Pay over Half of Total Federal Individual Income Taxes 1 (1998)

handle is hein.taxfoundation/sridxz0001 and id is 1 raw text is: TAX 1mmn FOUNDATION November 1998 No. 83 Top Five Percent of Taxpayers Pay Over Half of Total Federal Individual Income Taxes Figure 1 Percent of Federal Individual Income Taxes Paid by Income Group, 1986 and 1996 By Patrick Fleenor Senior Economist 'Mix Foundation 1996 - 1986 50.8% 41.8% 62.4% 54.0% I 81.3% 75.6% 95.7% 93.4% 4.3% 6.6% Source:lax FOundation l calculations Iased on preliminary IRS kdata. The latest data from the Internal Revenue Setvice show that more than half of all federal individual income taxes-50.8 percent-are paid by the five percent of taxpayers who earn the most. In 1996, the latest year for which data are available, this top five percent consisted of 6.0 million earners whose adjusted gross incomes (AGI) were higher than $101,202. Even among this prosperous group, the highest earners paid the lion's share.The top one percent of earners in the country are pay- ing close to a third of all the taxes collected. That's approximately 1.2 million earners who paid 32.3 percent of 1996's federal individual income taxes. A time series analysis of the data shows that since 1980 the share of federal individual income taxes borne by the top five percent has increased markedly. In 1980 these individuals paid 36.8 percent of federal individual income taxes, a hefty share but significantly less than their 50.8 percent share in 1996. Naturally, this has resulted in a corresponding decline in the share of the tax burden shouldered by the remaining 95 percent of taxpayers. Federal Individual Income Taxes Paid by Income Group Figure 1 presents a breakdown of total federal individual income tax payments by income percentile. It shows that in 1996 the top one percent of income earners-those with adjusted gross incomes (AGIs) in excess of $229,230 (see'lable 1)-paid 32.3 percent of federal individual income taxes. F 32.3% 25.0% Top 1% Top 5% Top 10% Top 25% Top 50% Bottom 50% I I I I I I 0 20 40 60 80 100

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