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November 20, 2009
Progressive Taxation is punishing success
Scott Strzelczyk
According to the National Taxpayers Union, the top 1% of federal income tax filers paid 36.89% and 40.42% of all federal income taxes in 2004 and 2007, respectively. That equates to a 9.6% increase in the percentage of taxes paid over the four year period.
Total tax collected increased by 44% from 2004 to 2007; however the top1% actual taxes paid increased by 54% in the same period. The top 25% paid nearly 87% of all federal income taxes in 2007, while the bottom 50% paid 2.89%. For Tax Year 2007 Percentiles Ranked by AGI
| AGI Threshold on Percentiles
| Percentage of Federal Personal Income Tax Paid
| Top 1%
| $410,096
| 40.42
| Top 5%
| $160,041
| 60.63
| Top 10%
| $113,018
| 71.22
| Top 25%
| $66,532
| 86.59
| Top 50%
| $32,879
| 97.11
| Bottom 50%
| <$32,879
| 2.89
| Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service
|
For Tax Year 2004 Percentiles Ranked by AGI
| AGI Threshold on Percentiles
| Percentage of Federal Personal Income Tax Paid
| Top 1%
| $328,049
| 36.89
| Top 5%
| $137,056
| 57.13
| Top 10%
| $99,112
| 68.19
| Top 25%
| $60,041
| 84.86
| Top 50%
| $30,122
| 96.70
| Bottom 50%
| <$30,122
| 3.30
| Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service
|
According to the Tax Foundation analysis of 2007 taxpayer data, the top 1% of federal income tax filers earned 22.8% of adjusted gross income but paid 40.42% of all federal income taxes. In 2007, there were a total of 141.1 million income tax returns filed across all filing statuses. Therefore, the top 1% includes 1.41 million federal income tax returns and the top 25% includes 35.27 million federal income tax returns.
According to the 2008 federal government budget (pg 21) the actual federal income taxes received by the federal government in 2007 was 1.169 trillion dollars. The top 1% paid $472.5 billion in federal income taxes. The top 25% paid $1.012 trillion in federal income taxes. The bottom 50% paid $33.84 billion in federal income taxes. Data in the chart below comes from the National Taxpayers Union, Tax Foundation data, and the 2008 federal government budget. Federal Income Tax Collected (in Billions)
| Percentiles Ranked by AGI
| 2004
| 2007
| 2007 # of income tax returns filed
| Top 1%
| 298.4
| 472.5
| 1.41 million
| Top 5%
| 462.2
| 584.5
| 7.1 million
| Top 10%
| 568.7
| 832.6
| 14.1 million
| Top 25%
| 686.5
| 1,012.2
| 35.27 million
| Top 50%
| 784.2
| 1,135.2
| 70.535 million
| Bottom 50%
| 24.8
| 33.8
| 70.535 million
| Total Federal income Taxes
| 809
| 1,169
| 141.1 million
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