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Economic News, Data and Analysis

The Rich are Getting Richer

Data from the IRS shows that the average income of the 400 wealthiest US taxpayers was $173.9 million in 2000. On average they paid 22.4% of their income in taxes.
With recent tax changes, their average tax burden is likely to be even smaller.
According to the Times, “[h]ad President Bush’s latest tax cuts been in effect in 2000, the average tax bill for the top 400 would have been about $30.4 million a savings of $8.3 million, or more than a fifth, according to an analysis of the I.R.S. data by The New York Times. That would have resulted in an average tax rate of 17.5 percent.”
Can I be rich too? Please?
Click for:
Data on the top 400
Data on the returns with income over $200,000

Very Richest’s Share of Income Grew Even Bigger, Data Show
The 400 wealthiest taxpayers accounted for more than 1 percent of all the income in the United States in the year 2000, more than double their share just eight years earlier, according to new data from the Internal Revenue Service. But their tax burden plummeted over the period.
The data, in a report that the I.R.S. released last night, shows that the average income of the 400 wealthiest taxpayers was almost $174 million in 2000. That was nearly quadruple the $46.8 million average in 1992. The minimum income to qualify for the list was $86.8 million in 2000, more than triple the minimum income of $24.4 million of the 400 wealthiest taxpayers in 1992.
While the sharp growth in incomes over that period coincided with the stock market bubble, other factors appear to account for much of the increase. A cut in capital gains tax rates in 1997 to 20 percent from 28 percent encouraged long-term holders of assets, like privately owned businesses, to sell them, and big increases in executive compensation thrust corporate chiefs into the ranks of the nation’s aristocracy.
This year’s tax cut reduced the capital gains rate further, to 15 percent.

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Filed under: Data, Economics, Fiscal Policy

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