I wanted some better numbers than guessing how many taxpayers were in the top 1%, how much they paid, and how much we would need to increase their taxes to get an additional $400 Billion.
I found the info below on politico by Googling “one million income”. It’s not Fox, no one should dispute the numbers in this article. I was surprised that only the top 0.1% earned $1 million or more.
People and households earning $1 million or more annually made up just 0.1 percent, or just over 235,000, of the 140 million tax returns filed in 2009, and just 8,274 returns were filed by people making $10 million or more.
Though the tax rate for Americans earning a gross adjusted income of $1 million or more averaged 24.4 percent, up from 23.1 percent in 2008, that’s still lower than the 28.5 percent rate they paid in 2002
And, the data show, the 235,413 taxpayers who reported earning seven digits or more in 2009 took in a total of $726.9 billion — yet 1,470 paid not a penny of income taxes. In 2007, 959 Americans earning $1 million or more paid no income taxes.
http://www.politico.com/news/stories/0811/60717.htmlLet's see if we can put the $400 B increase on those making $1 Million or more.
Average tax rate for $1million or more: 24.4%
Total income of 7 figure earners: $726.9 Billion
Tax paid: $726.9B x 24.4% = $177,363,600,000.
Increase of 3%:
27.4% of $726.9 B = $199,170,600,000.
Difference: $21,807,000,000. No where near the $400 B increase (that won’t help much) by a factor of about 18 times.
Let's just add $400 B and find a rate:
($177,363,600,000 + $400B) / $726.9 B = $577,363,600,000 / $726.9 B = 79% overall average tax rate. That $400B increase would only cover about 1/3 of the deficit.
I think we will need to go lower than $1 Million income.
I need to know the circumstances of the 1470 (0.6% of 235,413) that paid no tax before I condemn them.
1% of 140,000,000 taxpayers = 1,400,000 taxpayers. I wanted to find out how much tax the top 1% paid. I found the info below for 2008 (a year earlier than the Politico numbers but probably close enough.)
The info below is from Kiplinger. I put in income numbers in the calculator until it showed the tax paid by the top 1% rather than the top 0.1%.
How Your Income Stacks UpUpdated October 2010 / Based on IRS data from 2008 tax returns
Your $1,000,000 adjusted gross income (AGI) puts you in the top 1% of earners.
The top-earning 1% of taxpayers reported 22.0% of all AGI and paid 38.02% of total income taxes.
Together, you and the other 1.4 million taxpayers with incomes of $380,354 or more paid a total of $450.9 billion in federal income taxes.
http://www.kiplinger.com/tools/income_rank/index.php I didn't find the the average tax rate for the top 1% or the total taxable income by the top 1% (vs. the top 0.1%) to calculate the average rate.
It looks like in order to raise an additional $400 B from the top 1%, we will need to nearly double ({$450.9B + $400 B} / $450.9 B = 1.89 times) the tax paid by them. That’s a bit more than the modest 3% touted by a lot of people.
Is that enough?
