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Who Makes Up the Top 1%?
There has been much talk in the media about the top 1% in our country thanks to the Occupy Wall Street protests and the discussion in Washington about raising taxes on those who have higher incomes. The IRS has released some interesting information that the top 1% of all filers paid 36.7% of all federal income taxes in 2009 which is the most recent year this information was analayzed. This share of taxes paid is down from 38% the prior year.
To qualify for the top 1% of earners in 2009 you needed an adjusted gross income at at least $343,927. Of course this just looks at income. There are certainly plenty of retired (or semi-retired) folks with a fairly large net worth who no longer have a large income. I’m sure the protestors on Wall Street would consider someone with a multi-million dollar net worth but a low tax obligation to be part of this 1% group.
So, if you are not in the top 1% of earners you are probably wondering where you may be relative to the rest of that make up the other 99%? The highest 5% of earners had adjusted gross income of at least $154,643. (The top 5% of filers paid 58.7% of total federal income taxes in 2009.) The top 10% had adjusted gross income of at least $112,124 and accounted for 70.5% of all federal income taxes paid. The bottom 50% of filers paid 2.25% of all federal income taxes.
Now, it is important to remember that the above numbers are for federal income taxes. Payroll taxes (Social Security and Medicare) are borne largely by those with incomes under $100,000 so while the bottom 50% of all filers only accounted for 2.25% of federal incomes taxes, the share of total tax burden for this group was certainly much higher.