![]() The top 1 percent of taxpayers (AGI of $515,371 and above) paid the highest effective income tax rate, roughly 26.8 percent, more than six times the rate faced by the bottom 50 percent of taxpayers. For example, taxpayers with AGIs between the 10th and 5th percentiles ($145,135 and $208,053) paid an average effective rate of 14.3 percent-3.5 times the rate paid by those in the bottom 50 percent. As household income increases, the IRS data shows that average income tax rates rise. The bottom 50 percent of taxpayers (taxpayers with AGIs below $41,740) faced an average income tax rate of 4.0 percent. The 2017 IRS data shows that taxpayers with higher incomes paid much higher average income tax rates than lower-income taxpayers. High-Income Taxpayers Paid the Highest Average Income Tax Rates The top 1 percent of taxpayers paid roughly $616 billion, or 38.5 percent of all income taxes, while the bottom 90 percent paid about $479 billion, or 29.9 percent of all income taxes. In 2017, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. ![]() In contrast, the top 1 percent of all taxpayers (taxpayers with AGI of $515,371 and above) earned 21.0 percent of all AGI in 2017 and paid 38.5 percent of all federal income taxes. This group of taxpayers paid $49.8 billion in taxes, or roughly 3 percent of all federal individual income taxes in 2017. ![]() In 2017, the bottom 50 percent of taxpayers (those with AGI below $41,740) earned 11.3 percent of total AGI. High-Income Taxpayers Paid the Majority of Federal Income Taxes Source: IRS, Statistics of Income, Individual Income Rates and Tax Shares (2019). “Income split point” is the minimum AGI for tax returns to fall into each percentile. Note: Table does not include dependent filers. The share of income earned by the top 1 percent rose from 19.7 percent in 2016 to 21.0 percent in 2017, and the share of the income tax burden for the top 1 percent rose as well, from 37.3 percent in 2016 to 38.5 percent in 2017. The average individual income tax rate for all taxpayers rose from 14.2 percent to 14.6 percent. Taxes paid rose to $1.6 trillion for all taxpayers in 2017, an 11 percent increase from the previous year. There were 2.4 million more tax returns filed in 2017 than in 2016, and average AGI rose by $4,232 per return, or 5.8 percent. ![]() Total AGI grew $780 billion from 2016 levels, significantly more than the $14 billion increase from 2015 to 2016. Taxpayers reported $10.9 trillion in adjusted gross income (AGI) on 143.3 million tax returns in 2017, the last tax year before the Tax Cuts and Jobs Act took effect. Reported Income Increased and Taxes Paid Increased in 2017
0 Comments
Leave a Reply. |