How much do you need to make to be in the top 10% earners in the U.S.? What about the top 1%?
The top 1% is a politically vilified group, but they may not be who you think they are. So, who are the 1%? What is the price of membership in this club? Could you be in the top 10%? Finally, do the rich pay their share of taxes?
Who Is In the Top 10%?
"The top 10% had at least $116,623 of adjusted gross income" [Tweet this]
Let's start with the top 10%, because more people belong to that group than you may expect. Based on 2010 income tax returns using adjusted gross income (basically the number at the bottom of page 1 of your Form 1040, before exemptions and deductions):
- The top 10% had at least $116,623 of adjusted gross income (AGI).
- The top 10% includes 45% of the total AGI.
- The top 10% paid 70.6% of the total income tax burden.
The bottom 90% of taxpayers paid less than 30% of the total national income tax.
The bottom 50% of taxpayers paid 2.36% of the total federal income tax revenues.
- The top 5% had at least $161,579 of AGI.
- The top 5% includes 34% of the total AGI.
- The top 5% paid 59.1% of the total income tax burden.
Now, a drum roll for the top 1%:
- The top 1% had at least $369,691 of AGI.
- The top 1% includes 19% of the total AGI.
- The top 1% paid 37.4% of the total income tax burden.
Now you know what it takes to "join the club."
Income equality and tax fairness are challenging dilemmas. Be well informed and draw your own conclusions as the debate continues over the fiscal cliff and other economic policy issues.
About Bruce J. Berno, CFP®
Bruce J. Berno, CFP® is the founder of Berno Financial Management, Inc. a fee-only comprehensive personal financial planning and investment advisory firm headquartered in Cincinnati, Ohio. Since 1993, Berno Financial Management has been helping individuals and families achieve financial peace of mind. For more information about Berno Financial Management, visit http://www.bernofinmgt.com.