Thursday, February 18, 2010
IRS Releases 2007 Tax Return Data on Wealthiest 400 Americans: Income Soared 31% (to $345m), Tax Rate Fell 3.2% (to 16.6%)
The IRS has released Individual Income Tax Data of Taxpayers with the Top 400 Adjusted Gross Income:
This release contains four tables which contain information from the Top 400 Individual Income Tax Returns for each of Tax Years 1992 through 2007. Table 1 contains frequencies, money amounts, and average dollar amounts for the major income, deduction, and tax credits reported as part of the Form 1040 (U.S. Individual Income Tax Return). Table 2 shows ranges of marginal tax rate for the various statutory rates (including the alternative minimum tax rates) that were in effect for Tax Years 1992 through 2007 while Table 3 shows the range of average tax rates up to 35 percent and over, computed as total income tax divided by adjusted gross income.
The data in Tables 1 - 3 are based on the individual returns with the largest adjusted gross income reported each specific year shown and do not necessarily reflect the same taxpayers over the 16-year time period reflected. Therefore, Table 4 is available to present the number of times an individual return appeared among the 400 largest adjusted gross incomes for each of tax years 1992 through 2007.
Tax Rate of
The 400 Individual Income Tax Returns Reporting the Highest Adjusted Gross Income Each Year, 1992-2000, by Michael Parisi & Michael Strudler
David Cay Johnston examines the data in Tax Rates for Top 400 Earners Fall as Income Soars, IRS Data Show:
The incomes of the top 400 American households soared to a new record high in dollars and as a share of all income in 2007, while the income tax rates they paid fell to a record low, newly disclosed tax data show.
In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31% from their average $263.3 million income in 2006, according to figures in a report that the IRS posted to its Web site....
Their effective income tax rate fell to 16.62%, down more than half a percentage point from 17.17% in 2006, the new data show. ...
Since 1992, the bottom 90% of Americans have seen their incomes rise by 13% in 2009 dollars, compared with an increase of 399% for the top 400.
The annual top 400 report was first made public by the Clinton administration, but the George W. Bush administration shut down access to the report. Its release was resumed a year ago when President Obama took office. The Statistics of Income Division at the IRS created the top 400 reports at the urging of Joel Slemrod, a business professor at the University of Michigan. ...
Most of the income going to the top 400 tax returns is from capital. Salaries and wages accounted for only 6.5% of the top 400's income in 2007, down from 7.4% in 2006 and 26.2% in 1992. The average salary rose from 2006 to 2007, however, just at a slower rate than overall income growth.
The biggest source of income was capital gains, which are taxed at a maximum rate of 15%. Gains accounted for 66.3% of 2007 income for the top 400, up from 62.8% in 2006 and 36.1% in 1992.
Only 7 of the top 400 have shown up in the report every year, the IRS data showed. Of the 6,400 returns covered by the 16 years of the report, the IRS said that 2,515, or almost 40%, appeared one time.
See this chart for the 1992-2007 data.
Press and blogosphere coverage:
- Bloomberg, Top 400 Earners in U.S Averaged $345 Million in 2007, IRS Says
- Daily Finance, Super Rich Made $345 Million Each in 2007 as Their Tax Rates Plummeted
- Huffington Post, Tax Rates For America's Top 400 Earners Fell As Income Soared In 2007, According To IRS
- Salon, The Rich Got Richer, and Paid Less Taxes; What George W. Bush Didn't Want You to Know About the Wealthiest 400 Americans
- Salon, The Top 400: Income Way Up and Taxes Way, Way Down
- Wall Street Journal, A Look at the Tax Returns of the Top 400 Taxpayers