Who Pays the Federal Individual Income Tax?
by David Hoffman PLEASE DO NOT CITE—AN UPDATED VERSION OF THIS STUDY IS AVAILABLE. Please email publications@taxfoundation.org for details. Special Report No. 109 Executive Summary The latest income tax data from the Internal Revenue Service show that in 1999, the 25 percent of taxpayers who earned the most paid more than five out of every six dollars collected, or 83.5 percent. This top 25 percent consisted of 31.5 million tax returns showing adjusted gross incomes (AGI) of higher than $52,965 (see Table 1 on page 2). A time series analysis of the data shows that since 1980, the share of federal individual income taxes paid by the top 25 percent has increased markedly. Figure one below presents two snapshots from that series: 1999, the latest data available, and 1989, a decade earlier. In 1989, the top 25 percent of taxpayers paid 77.2 percent of federal individual income taxes, a hefty share but significantly less than its 83.5 percent share in 1999. Naturally, this has resulted in a
