Interesting Tax Figures

For what they're worth (all numbers are for federal income taxes only).

The data below comes from tables at this link, which also has some reminders (emphasis mine):

Some important facts to keep in mind about the information provided on this page.

(1) All tax returns that have a positive AGI are included, even those that do not have a positive income tax liability.

(2) Income tax after credits (the tax measure above) does not account for the refundable portion of EITC. If it were included (as is often the case with other organizations), the tax share of the top income groups would be higher. The refundable portion is legally classified as a spending program by the Office of Management and Budget and therefore is not included by the IRS in these figures.

In 1980:

• the top 1% consisted of 932 thousand taxpayers who had AGI greater than $80,580
• they had a total of $138B in AGI, which comprised 8.4% of overall AGI
• they paid a total of $47B in taxes, which comprised 19.05% of the overall taxes
• their average effective tax rate was 34.47%
• per taxpayer, average revenue was $50,429

In 2006:

• the top 1% consisted of 1,357,192 taxpayers who had AGI greater than $388,806
  
• they had a total of $1,792B in AGI, which comprised 22.06% of overall AGI
• they paid a total of $408B in taxes, which comprised 39.89% of overall taxes
• their average effective tax rate was 22.79%
• per taxpayer, average revenue was $300,663

Even though the effective rate went down markedly, the amount of tax collected per taxpayer went up even more markedly, rising by a factor nearly six. And the share of taxes collected from this group more than doubled, although their share of income also went up 2.5x.

In 1980:

• the bottom 50% consisted of 46,619 thousand taxpayers who had positive AGI less than $12,936
• they had a total of $288B in AGI, which comprised 17.68% of overall AGI
• they paid a total of $18B in taxes, which comprised 7.05% of the overall taxes
• their average effective tax rate was 6.10%
• per taxpayer, average revenue was $386

In 2006:

• the bottom 50% consisted of 67,859,580 taxpayers who had postive AGI less than $31,987
• they had a total of $1,016B in AGI, which comprised 12.51% of overall AGI
• they paid a total of $31B in taxes, which comprised 2.99% of overall taxes
• their average effective tax rate was 3.01%
• per taxpayer, average revenue was $456

So their effective tax rate was cut in half, while their income went up 2.4x. Even though the effective rate went down markedly, the amount of tax collected per taxpayer not surprisingly did go up a bit (1.2x). However, the share of taxes collected from this group dropped quite a bit.

It is worth noting that the income figure for the lower 50% is the upper limit, while the figure for the top 1% is a lower limit. So comparisons of those numbers should keep that in mind. However, this fact must also be balanced with the recognition that a very large number of the bottom 50% actually had zero or even negative tax liability.

Following this link, we can see that in 2004, there were a total of 131,113,969 tax returns filed. Of those, 42,545,501 (32.4%) had $0 tax liability, or even had negative tax liability and actually received money from the IRS. An estimated 15 million more people earned some income but did not file a return. When these non-filers are added to the non-payers, they add up to 57.5 million income-earning people who will be paying no income taxes. Even 57.5 million is not the actual number of people because one tax return often represents several people. When all of the dependents of these income-producing people are counted, roughly 120 million Americans – 40 percent of the U.S. population – are outside of the federal income tax system.

We can also learn from that same link that

Despite the charges of critics that the tax cuts enacted in 2001, 2003 and 2004 favored the “rich,” these cuts actually reduced the tax burden of low- and middle-income taxpayers and shifted the tax burden onto wealthier taxpayers.