High-income Earners Face Rising Tax Burden
According to the IRS, the top 1% of all filers paid about 38.1% of all federal income taxes in 2012 (most recent year analyzed). That’s up from 35.1% the previous year. IRS reported 21.9% of total adjusted gross income, also larger than the year before. Filers needed to have AGIs of at least $434,682 to qualify for the top 1% of earners. The burden should increase in 2013 numbers since the top tax rate increased after 2012.
The highest 5% paid 58.9% of total income tax and accounted for 36.8% of all adjusted gross income. They each had AGI of at least $175,817. The top 10% of filers, those with AGIs of $125,195 or more, bore 70.2% of the total tax burden while bringing in slightly less than 48% of the total adjusted gross income.
The bottom 50% of filers paid 2.8% of the total federal income burden. Their share is low because the figures do not include social security tax payments and because many get substantial tax relief through the earned income credit.
Davis and Hodgdon Associates CPAs has been assisting nonprofits, individuals and businesses with tax and accounting services in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].