TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, October 18, 2005

Tax Foundation's Countdown to Tax Reform III: Who Pays Income Tax in America

Tax_foundation_9The Tax Foundation today published Countdown to Tax Reform, Part III:  Who Pays Income Taxes in America? as part of a series in anticipation of the expected November 1 release of the report of the President’s Advisory Panel on Federal Tax Reform,   Here is a taste:

What are the characteristics of those who pay federal income taxes in America today? As noted in Part II, the vast majority of taxpayers who face the highest marginal tax rates tend to be married couples. But aside from being married, they also tend to be dual-income, live in high-cost urban areas, are older, college educated, and are engaged in business activities. Each of these characteristics makes them more likely to be exposed to the highest marginal tax rates....

In 1967, less than half of all working couples were dual-income. Today, nearly 7 out of 10 working couples are dual-income. Between 1980 and 2003, the number of dual-income working couples grew by nearly 8 million, or 31%, from 29.5 million to 33.2 million....

...[D]ual-income couples are largely found in upper-income groups, as standard income distribution tables such as Table 1 shows. More than 73% of dual-income couples are in the top two income groups (quintiles). Indeed, 41% earn enough to be among the top 20% of taxpayers. While dual-income couples comprise just 25% of all taxpayers, they comprise nearly 45% of the fourth quintile and nearly 62% of the top quintile.

Dual-Income Couples Are Statistically "Rich"

Income Group

Share of TPs

% of Dual-Incomes

Bottom 20

$0 - $14,280



Second 20%

$14,281 - $25,756



Middle 20%

$25,757 - $42.617



Fourth 20%

$42,618 - $71,027



Top 20%

$71,028 +






For prior TaxProf Blog coverage of other pieces in the series, see:

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