assuming that by "total income" taxes, these numbers include not only income, but dividends, capital gains You assume correctly. The total tax on line 61 of your 1040 is the total tax on every form of income, less all credits. The picture gets even starker once you add state and city income taxes.
I suspect that the downturn at the $2 million mark reflects a high share of income from tax-exempt municipal bonds. These securities are disproportionately held by mutual funds and high-net-worth individuals. The lower capital gains rate also plays a big role.
Another thing to remember is that the income categories are highly fluid. IIRC the top 5% has about a 20% annual turnover - it's not the same people year after year.
Where is the split? Just found some 2007 data: "Including all tax returns that had a positive AGI, taxpayers with an AGI of $160,041 or more in 2007 constituted the nation's top 5 percent of earners. To break into the top 1 percent, a tax return had to have an AGI of $410,096 or more, the first time that this threshold has exceeded $400,000." http://www.taxfoundation.org/publications/show/250.html includes the tables showing the entire distribution. You and I and a lot of our friends living in this high-cost, high-income area are probably in the top 10%, easily.
The second graph... I don't know that it is *alarming*. It is not. The first one is, to me. The Bush tax cuts benefited everybody, but they significantly reduced the number of people paying federal income taxes, decreasing the number of stakeholders potentially interested in control of federal spending. I wonder if Obama/Congress will let that part expire, too?
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timeasmymeasure
no subject
Date: 2009-08-04 04:14 pm (UTC)You assume correctly. The total tax on line 61 of your 1040 is the total tax on every form of income, less all credits. The picture gets even starker once you add state and city income taxes.
I suspect that the downturn at the $2 million mark reflects a high share of income from tax-exempt municipal bonds. These securities are disproportionately held by mutual funds and high-net-worth individuals. The lower capital gains rate also plays a big role.
Another thing to remember is that the income categories are highly fluid. IIRC the top 5% has about a 20% annual turnover - it's not the same people year after year.
Where is the split?
Just found some 2007 data: "Including all tax returns that had a positive AGI, taxpayers with an AGI of $160,041 or more in 2007 constituted the nation's top 5 percent of earners. To break into the top 1 percent, a tax return had to have an AGI of $410,096 or more, the first time that this threshold has exceeded $400,000."
http://www.taxfoundation.org/publications/show/250.html includes the tables showing the entire distribution. You and I and a lot of our friends living in this high-cost, high-income area are probably in the top 10%, easily.
The second graph... I don't know that it is *alarming*.
It is not. The first one is, to me. The Bush tax cuts benefited everybody, but they significantly reduced the number of people paying federal income taxes, decreasing the number of stakeholders potentially interested in control of federal spending. I wonder if Obama/Congress will let that part expire, too?