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  • Doing the Income Tax Math
     
    Published on Oct 06, 2008

    Article Tools:     Delicious          

    It doesn’t take an advanced degree in mathematics or accounting to know that the more money you make, the more taxes you pay. What might surprise you is where you stand on the income scale and how many of the country’s income tax dollars come out of your pocket. According to recent statistics from the IRS, taxpayers in the upper tax brackets pay a surprisingly large percentage of the personal income tax tab.

     

    If your adjusted gross income is more than $388,806, congratulations! You’re in the top 1% of all the nation’s income earners. Membership in that elite club entitles you, along with the others at your income level, to pay just a tad under 40% of all the personal income taxes collected by the IRS. To get into the top 10% of all earners, you need an AGI of $108,904 or more. Taxpayers in that group report 47% of the nation’s total income and shoulder 71% of the personal income tax burden.

     

    In contrast, those with an AGI of less than $31,988 fall into the lower half of the income scale and pay only 2.99% of the total tax bill. In fact, according to the IRS figures, 57% of all wage earners pay more in Social Security and Medicare taxes than they do in income taxes. The IRS also notes that this is the first time that the lower 50% of the income earners have paid less than 3% of the total income taxes.

     
     
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