Summary of Latest Federal Individual Income Tax Data

The Internal Revenue Service has released new data (July 30, 2009) on individual income taxes, reporting on calendar year 2007, a year in which the economy remained healthy and continued to grow.

In 2007, the top 1 percent of tax returns paid 40.4 percent of all federal individual income taxes,and earned 22.8 percent of adjusted gross income (AGI). Both of those figures, share of income and share of taxes paid, are significantly higher than they were in 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes.

That means the top 1 percent of tax returns paid more in federal individual income taxes than the bottom 95 percent of tax returns. Ok, what adjusted gross income (AGI) qualifies you for the top 1% status? Any dollar amount greater than $410,096. Not what I would consider to be super, super rich; but a whole lot less than what a lot of individuals would have guessed.

The top 5% of taxpayers (AGI over $160,041) paid 60.63% of all individual federal income taxes. The top 10% of taxpayers (AGI over $113,018) paid 71.22% of all individual federal income taxes. The top-earning 25 percent of taxpayers (AGI over $66,532) earned 68.7 percent of the nation's income, but they paid 86.6% of all federal individual income taxes. The bottom 50% (AGI less than $32,879) of all taxpayers paid 2.89% of all federal income taxes.

Therefore, I would surmise from the "2007 Individual Income Tax Data" that anyone whose AGI is greater than $66,000 will see a significant increase in their federal tax burden to cover the ever expanding cost of the federal government. (Did anyone say a national sales tax coming soon, like the VAT in Europe?) And, keep-in-mind that this summary was about your federal tax burden, not your state tax burden that will also be increasing in the near future!

Note: To enlarge table, double-click inside of it.
Source: The Tax Foundation