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IRS Releases its Statistics of Income Bulletin for Fall 2011

Tax

By Ron Kramer

On the same day that the Super Committee announced it had failed to reach an agreement to cut the federal budget deficit by $1.2 trillion over the next ten years, the Internal Revenue Service (IRS) released its Fall 2011 Statistics of Income Bulletin. The Bulletin contains information on Individual Income Tax returns filed for 2009. The statistics in the report are interesting to analyze since one of the sticking points in the deficit negotiations was the refusal of Republicans to agree with the Democrats' claim that wealthy Americans should pay more as their fair share of taxes.

The Bulletin is the most recent study of U.S. individual income tax data released by the IRS and provides information as to who paid individual income taxes in the United States for the 2009 tax year.

Exhibit I, below, is prepared from the 2009 tax return data provided by the IRS bulletin and summarizes how the burden of individual income taxes was borne by U.S. taxpayers in 2009 by the size of their adjusted gross income (AGI).
2009 U.S. Individual Income Tax Data by Adjusted Gross Income
Exhibit II, below, summarizes the share of total income tax paid by taxpayers at selected levels of AGI.
2009 Total Income Tax Paid by AGI
The following observations flow from Exhibits I and II:

  • For 2009, a total of 140,494,000 individual income tax returns were filed reporting adjusted gross income (AGI) amounting to $7.626 trillion. $865.9 billion in income taxes were paid.
  • U.S. taxpayers with AGI of $1,000,000 and above paid 20.50% of all U.S. individual income taxes but represented only 0.17% of all returns filed.
  • U.S. taxpayers with AGI of $500,000 and above accounted for 29.79% of all U.S. individual income taxes paid but represented only 0.52% of all tax returns filed.
  • U.S. taxpayers with AGI of $200,000 and above accounted for 50.15% of all U.S. individual income taxes paid but represented only 2.79% of all returns filed.
  • U.S. taxpayers with AGI of $100,000 and above accounted for 74.66% of all U.S. individual income taxes paid and represented 12.42% all of tax returns filed.
  • U.S. taxpayers with AGI of $50,000 and below accounted for 7.00% of all U.S. individual taxes paid and represented 66.16% of all tax returns filed.

The 2009 study indicates that taxpayers with AGI of $1,000,000 and above represent approximately 236,000 tax returns and make up approximately $726.9 billion of AGI. To fund the President’s job bill and to impose a “fair share” tax on wealthy Americans, Senate Democrats recently proposed a “millionaires tax” which would have imposed a 5.6% surtax on incomes over $1 million. The President’s jobs bill and the surtax were voted down in the full Senate.

Obviously, what’s a fair share of taxes is a matter of perspective. Hopefully, the 2009 Statistics of Income Bulletin can help you with your perspective on the issue.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person any tax-related matter.

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