US Income Shares, 1994 v. 2007

[Hannah Bell]

In 1994 the percent of total US income taken by each % of individual income tax filers and their effective tax rate ( ) was:

Top 1%: 14.3% (25.9%)

Top 5%: 28.8% (21.6%)

Top 10%: 40.0% (19.5%)

Top 25%: 63.0% (16.6%)

Bottom 50%: 14.8% (14.8%)


In 2007 the percent of total US income taken by each percent of income tax filers and their effective tax rate ( ) was:

Top 1%: 23.4% (20.6)

Top 5%: 39.0% (18.8%)

Top 10%: 49.6% (17.5%)

Top 25%: 69.9% (15.2%)

Bottom 50%: 12% (13.6%)


Income floor for each percentile in 2007 was:

Top 1%: ($458K) (1.4 million returns)

Top 5%: ($168K) (7 million returns)

Top 10%: ($115K) (14 million returns)

Top 25%: ($65K) (35 million returns)

Bottom 50%: (Under $32.4K) (70 million returns)


All figures taken from:

Individual Income Tax Returns with Positive "1979 Income Concept" Income

Published as: SOI Bulletin article - Individual Income Tax Rates and Tax Shares, Table 7
Tax Years: 1986 - 2007

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html#_grp3

[hfojvt]

1. I suppose I will have to update my spreadsheet

http://journals.democraticunderground.com/hfojvt/126

Here is a summary.

In 1986, the top 1% had 11.299% of all income. In 2006, they had 22.062%. In order to be in the top 1% you need a household AGI of $388,806.

In 1986, the bottom 50% had 16.661% of all income. In 2006, they had 12.515%. In order to be in the bottom 50% you need a household income of less than $31,987. In 1986, that number was $15,786. But in 2006 dollars, that 1986 number is $31,823. Thus, in real terms, the bottom 50% has only gained $164 in twenty years. The lower income of the top 1% has gone from $218,543 to $388,806 - a gain of $170,263. Their average gain was no doubt much higher since their total income went from $524.48 billion in 1986 (in constant 2006 dollars) to $1,791.886 billion in 2006. It more than tripled, while total income for the bottom 50% went from $773.55 billion to $1,016 billion in 2006 - a gain of only 31%, which is even smaller if you consider that population grew by 22.2% between 1990 and 2007, and by 24.6% from 1980 to 2000. (at this point I cannot find population figures for 1986 and 2006.)

The tax side is quite astounding as well. In 1986, the top 1% paid an average tax rate of 33.13%. This fell to 26.4% in 1987 (thanks to the Gipper) and to a low of 23.246 by 1990. It climbed to 25.05% in 1992 and to 28.01 in 1993 and was over 27% until 2002 when it was 27.248%. Then it went to 24.31% to 23.49% to 23.13% and finally to 22.79% in 2006.

****

So the tax rate for the top 1% continues to go down from 22.79 down to 20.6% and the threshhold is up by almost $70,000 from $388,806 to $458, 000.

So far a little off the pace to reach my projection for 2026, but Obama's tax surrender should continue to push us in that direction http://www.koch2congress.com/5.html

[hfojvt]

2. it took me a while but I figured out why my stats did not agree

you are using the table from "1979 income concept" whereas I used the one from "positive AGI"

the IRS says "The "1979 Income Concept" was developed to provide a more uniform measure of income across tax years. By including the same income and deduction items in each year's income calculation and using only items available on Federal individual income tax returns, the definition is consistent throughout the base years and can be used for future years to compare income by including only income components common to all years."

I'd like to see some concrete examples for how that works. Using the 1979 income concept stats, the tax system was much less progressive in 1986 - the top 1% were paying an average tax rate of 21.79% whereas the AGI stats say they were paying a rate of 33%. Which one is truer to reality and what changes in income and deductions account for the different percentages?

It seems to me that "1979 income concept" is an artifical construct which may or may not be a more accurate reflection of reality. Is it somehow cancelling out changes in tax laws that the stats are supposed to be showing?

[Hannah Bell]

6. good questions, i knee-jerk mistrust changes to the code from reagan & beyond

is why i used the 1979 concept numbers, & i like the idea of historical comparability.

but without digging into the stats don't know whether my knee-jerk led me to the best choice.

[hfojvt]

13. except I think the AGI tables reveal changes in the code as well

while the other seems to hide them. I mistrust this supposed historical comparability which makes the tax code seem less progressive in 1986 when the top marginal rates were higher. It seems to me that with wealth-friendly administrations like Reagans, Bush & Bush, and Clinton, that this "1979 income concept" may be deliberately designed to hide benefits to the wealthy.

The AGI numbers should be looking at actual income and what was actually paid, whereas the other is making some kind of modifications.

Hard to know though, without getting some idea of what the modifications are.

[Hannah Bell]

18. "Hard to know though, without getting some idea of what the modifications are."

agreed.

[dkf]

3. The problem isn't the taxes paid, its the income earned.

[GeorgeGist]

4. The income 'earned' is also a problem ...

because much of it doesn't require any work by the individual receiving it. The ruse is believing that money can work for you.

[blindpig]

5. Yep, labor is the source of all wealth. n/t

[Swede]

8. It sure isn't things. It's labor:peoples lives.

It should be pricesless.

[Hannah Bell]

7. The tax code is a primary determinant of income earned.

[lumberjack_jeff]

11. It's both.

The taxes paid used to employ people.

Now, those taxes are being hoarded by a few.

[WhaTHellsgoingonhere]

9. another great table, Hannah Bell

recommend

[lumberjack_jeff]

10. I like pie.

[hfojvt]

14. did you make those?

I had to use photos of the ones I had printed, which is kinda lame http://www.koch2congress.com/5.html

[lumberjack_jeff]

16. Yes... from Hannah's data. n/t

[FogerRox]

12. KnR, and increased income disparity leads to Societal and political instabilities.

Or in the case of the French and the Russians, Violent revolution. Funny how food on the table and a future for your kids makes folks leave the pitchforks in the garden shed.

[JackRiddler]

15. Thank you, K&R, and reposted at...

http://rigorousintuition.ca/board2/viewtopic.php?f=8&t=21495&p=373481#p373481

[Wilms]

17. n/t