Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

A: 48% & 0%. Q: Percent of individual income taxes paid by top 1% of taxpayers and bottom half (projected for 2015)

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Table 4 of the Fairness and Tax Policy document from the Joint Committee on Taxation contains projections from the committee for 2015 tax returns. The table projects income and taxes paid by income level.

All of the following income numbers are based on a fairly broad definition of income, starting with AGI and adding items such as employer social security taxes, employer payments for health insurance, workers comp payments, and nontaxable social security benefits.

(cross-posted from my other blog, Outrun Change.)

Key items that jump out at me:

The top 0.9% earners, or 1,557,000 taxpayers, are expected to have 18.7% share of income as defined and pay 48.2% of total individual income taxes. That is an average of $1,592,875 income with average $416,635 taxes paid.

The bottom 46.5% of earners, or 79,461,000 taxpayers, are expected to have 11.4% share of income as defined and not pay any tax as a group. Average taxpayers below the $40,000 income level won’t pay any income taxes. That group of taxpayers will be getting refunds.

You have to cross the $75,000 income level before the 69.7% of taxpayers start to pay taxes as a group.

Let me round those numbers off:

  • People with the top 1% of income will pay 48% of individual income taxes.
  • People with the bottom 46% of income won’t pay any income taxes.

Let me round off the Joint Committee’s projection for 2015 a bit further:

  • The top one percent of taxpayers are projected to pay half of income taxes.
  • The bottom half of taxpayers are projected to pay no income taxes.

The document is available at the link above. Check out page 20. Since this is a government document, it is not copyright protected. Here is the table:

tax payment distribution

Hat tip: TaxProf Blog.

Written by Jim Ulvog

March 4, 2015, 9:25 am at 9:25 am

Posted in Other stuff

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