Lots of interesting Fed income tax data

[Midpack]

Though it looks old, this was published in Jan 2023.

* In 2020, taxpayers filed 157.5 million tax returns, reported earning nearly $12.5 trillion in adjusted gross income (AGI), and paid $1.7 trillion in individual income taxes.
* The average income tax rate in 2020 was 13.6 percent. The top 1 percent of taxpayers paid a 25.99 percent average rate, more than eight times higher than the 3.1 percent average rate paid by the bottom half of taxpayers.
* The top 1 percent’s income share rose from 20.1 percent in 2019 to 22.2 percent in 2020 and its share of federal income taxes paid rose from 38.8 percent to 42.3 percent.
* The top 50 percent of all taxpayers paid 97.7 percent of all federal individual income taxes, while the bottom 50 percent paid the remaining 2.3 percent.
* The 2020 figures include pandemic-related tax items such as the non-refundable part of the first two rounds of Recovery Rebates and the $10,200 unemployment compensation exclusion.

https://taxfoundation.org/publications/latest-federal-income-tax-data/

 

[Montecfo]

Well yes. Our tax system is highly highly progressive, much more so than other western nations.

But you would never know that based on much of the press coverage.

 

[folivier]

And if they could learn to LBYM....

 

[DrRoy]

Our tax rate is usually in the high single digits.

 

[mrfeh]

Well yes. Our tax system is highly highly progressive

But much less progressive than it was 50-60 years ago.

And fed income taxes are but one tax people pay. Much more interesting to look at total taxes paid.

 

[jebmke]

Well yes. Our tax system is highly highly progressive, much more so than other western nations.

But you would never know that based on much of the press coverage.

Yes, but it is a difficult comparison. In the US, some public policy choices are implemented via the tax code that are done other ways elsewhere.

The education credits are one example. In many other countries the education system is funded through public expenditures rather than through tax credits to individuals.

 

[pjigar]

But much less progressive than it was 50-60 years ago.

And fed income taxes are but one tax people pay. Much more interesting to look at total taxes paid.

And for the rest of the Texas: you "personally" get something in return.
e.g.
FICA = get SS and medicare (actually more benifits for people who paid less).
Property tax = Services for the place you live
Gas tax = road maintenance

 

[Montecfo]

But much less progressive than it was 50-60 years ago.



And fed income taxes are but one tax people pay. Much more interesting to look at total taxes paid.

According to the tax foundation, the federal income tax system has become more progressive over time.

https://taxfoundation.org/us-income...deral tax code has,below 3 percent since 2007.

I think it is easy to mistake lower tax rates for lack of progressivism.

 

[TheWizard]

A while back, I think I recall that a fairly large percentage of adult US citizens pay zero Federal income tax. Like 30% or more of the total adult population.

So are those folks included as "taxpayers" in the OP statistics?

 

[donheff]

A while back, I think I recall that a fairly large percentage of adult US citizens pay zero Federal income tax. Like 30% or more of the total adult population.

So are those folks included as "taxpayers" in the OP statistics?

Yes, they are but that does not include the payroll tax that most of them pay. Almost everybody at the low end pay no income tax and some escape even payroll tax thru tax credits. But lets face it, how much do we want to tax some guy (or more likely single mother) trying to raise kids on a couple of minimum wage jobs.

 

[Sunset]

A while back, I think I recall that a fairly large percentage of adult US citizens pay zero Federal income tax. Like 30% or more of the total adult population.

So are those folks included as "taxpayers" in the OP statistics?

I would think many are not, as below a certain income some people don't even file a tax return.

 

[braumeister]

LOUIS XIV’S finance minister, Jean-Baptiste Colbert, famously declared that “the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

Which reinforces the point that it is indeed an art. Some countries and some governments are better at it than others, for a wide variety of reasons.

 

[ls99]

What would be a more interesting number is the amount of $$$$$ the IRS collects on an average day.

 

[mrfeh]

According to the tax foundation, the federal income tax system has become more progressive over time.

https://taxfoundation.org/us-income...deral tax code has,below 3 percent since 2007.

I think it is easy to mistake lower tax rates for lack of progressivism.

Look at the top tax rate before the 80s:

https://www.wolterskluwer.com/en/expert-insights/whole-ball-of-tax-historical-income-tax-rates

The Tax Foundation is a biased organization, as can be seen in the bullet points spelled out in the first post in this thread, which are designed to create an emotional reaction of "the rich are being taxed to death" and/or "the poor are a bunch of freeloaders".

 

[MichaelB]

What would be a more interesting number is the amount of $$$$$ the IRS collects on an average day.

The Treasury publishes “Daily Treasury Statement” every business day with a breakdown of income and spending. The statement from May 15 is here and the archive of daily statements going back to 1998 is here.

 

[Qs Laptop]

I found the fact that the federal government had collected 35% less tax revenues in 2023 than it had at the same point in 2022 to be troubling. This comparison was generated the week after Tax Day in both 2022 and 2023.

https://thehill.com/business/397103...ts-raise-serious-concerns-about-debt-ceiling/

 

[USGrant1962]

Look at the top tax rate before the 80s:

https://www.wolterskluwer.com/en/expert-insights/whole-ball-of-tax-historical-income-tax-rates

The Tax Foundation is a biased organization, as can be seen in the bullet points spelled out in the first post in this thread, which are designed to create an emotional reaction of "the rich are being taxed to death" and/or "the poor are a bunch of freeloaders".

Tax Foundation presents IRS/CBO data. They show 1979-1981 when the "top tax rate" was 70%. Their analysis holds.

 

[mrfeh]

Tax Foundation presents IRS/CBO data. They show 1979-1981 when the "top tax rate" was 70%. Their analysis holds.

But you need to pay attention to the details and wording.

The wealthy are paying a bigger total dollar amount in federal taxes because they keep getting a bigger share of the pie: https://www.statista.com/statistics/203247/shares-of-household-income-of-quintiles-in-the-us/

 

[SevenUp]

Tax Foundation presents IRS/CBO data. They show 1979-1981 when the "top tax rate" was 70%. Their analysis holds.

But you need to pay attention to the details and wording.

The wealthy are paying a bigger total dollar amount in federal taxes because they keep getting a bigger share of the pie: https://www.statista.com/statistics/203247/shares-of-household-income-of-quintiles-in-the-us/

Until everyone agrees on the same operative definition of the word "fair" with regard to taxes, disagreements over the same data will persist.

 

[ls99]

The Treasury publishes “Daily Treasury Statement” every business day with a breakdown of income and spending. The statement from May 15 is here and the archive of daily statements going back to 1998 is here.

Thanks for the links. I had no clue how to find that info.
No wonder congress talks millions, billions etc. in spending.

 

[CardsFan]

But you need to pay attention to the details and wording.

The wealthy are paying a bigger total dollar amount in federal taxes because they keep getting a bigger share of the pie: https://www.statista.com/statistics/203247/shares-of-household-income-of-quintiles-in-the-us/

First, there is no pie. The amount of money earned is not fixed. But if you want to use a pie, the whole pie got bigger.

As to the bold above: Just how is that a problem? Their income goes up, and their taxes go up. Isn't that what you want in a progressive tax system?

 

[aaronc879]

Looks like the 1% make WAY too much money compared to the bottom income people.

 

[mrfeh]

First, there is no pie. The amount of money earned is not fixed. But if you want to use a pie, the whole pie got bigger.

Correct. And of that bigger pie, the wealthy continue to get more.

As to the bold above: Just how is that a problem? Their income goes up, and their taxes go up. Isn't that what you want in a progressive tax system?

It's not a problem. I'm arguing against the folks that are saying the wealthy are getting the short end of the stick.

 

[MichaelB]

I found the fact that the federal government had collected 35% less tax revenues in 2023 than it had at the same point in 2022 to be troubling. This comparison was generated the week after Tax Day in both 2022 and 2023.

https://thehill.com/business/397103...ts-raise-serious-concerns-about-debt-ceiling/

The Treasury daily receipts show a much different set of numbers. Taxes collected fiscal YTD 2023 are higher compared with the same period ‘22, and taxes collected in the month of April are a bit lower. I don’t understand the numbers reported in the linked article but it looks like they may be referencing to taxes withheld on the on April 15 ‘22 vs April 17 ‘23

 

[aaronc879]

A while back, I think I recall that a fairly large percentage of adult US citizens pay zero Federal income tax. Like 30% or more of the total adult population.

So are those folks included as "taxpayers" in the OP statistics?

I pay little to no federal income tax. I would love to have enough income or assets to pay high taxes. That is not a bad problem to have. I'll pay 30% on $500K income over paying zero on $15K if I could.