Tax Breaks
How Your Income Stacks Up
Where do you rank as a taxpayer? You may not feel rich earning $35,000 a year, but you’re in the top half of taxpayers. Make $70,000, and you earn more than 75% of fellow taxpayers.
By Kevin McCormally, Editorial Director, Kiplinger.com
December 17, 2009
Even as the Great Recession ends, we know the economic wounds it inflicted will take years to heal. The national unemployment rate has breached 10%, and unemployment is higher than 12% in California and above 15% in Michigan. A new study from the Department of Agriculture found that nearly 50 million Americans struggled at some point in 2008 to get enough to eat.
More than 40 million Americans are officially living in poverty. And you might be surprised at how little income it takes to not be considered poor by the federal government. For 2008, the poverty threshold for a single person under age 65 was an income of $11,201, or less than $1,000 a month. For a family of four, the threshold was $21,834. For a family of six, $28,769.
With that perspective, you may wonder just how your income stacks up against that of your fellow citizens. New statistics from the IRS provide an answer. The numbers here come from an analysis of 2007 tax returns, the most recent ones that have been studied.
The data show that an income of $32,879 or more puts you in the top half of taxpayers. Earning a bit more than twice that much -- $66,532 -- earns you a spot among the top 25% of all earners. You crack the elite top 10% if you earn more than $113,018.
And $410,096 buys top bragging rights: Earn that much or more and you're among the top 1% of all American earners.
Kiplinger has developed an online calculator to quickly show you -- based on your personal adjusted gross income -- into which income category you fall and, as a bonus, what percentage of the nation’s tax burden is borne collectively by you and your fellow citizens who are in that income category. The following table shows the income categories and the percentage of income earned and tax burden paid by each category.
Reader Comments (85)
Posted by: Daniel Martin at 12/17/2009 11:54:32 AM
When liberals intent on raising taxes tell you that the rich don't pay their fair share of taxes, give them a raspberry. With the AMT, we clearly see here that the top 5% of wage earners are already paying 61% of all taxes paid. The graduated income tax is inherently unfair, and punishes hard work and productivity.
Posted by: David at 12/17/2009 12:26:20 PM
So the top 1% of earners pay 40% of the tax burden - So why do people (and Obama) think the rich don't pay their "Fair Share"?
Posted by: Ricardo at 12/17/2009 04:02:19 PM
Interesting... does this calculation includes people who earn income from their businesses, investments, etc... or is this calculation solely based on people who earn income as employees?
Posted by: jc at 12/17/2009 05:08:24 PM
In response to David's post, you are JUST like the GOP who sees only what you want to see...CAN you live on less the 33K a year????????...probably not...To top it off, your precious 1% uses more loop holes the a dollie...Sorry but even the Bible says that the rich should take care of the poor...
Posted by: madlipper at 12/17/2009 05:24:18 PM
Its pretty clear the bottom 50% don't pay a lot of Federal taxes, but they do pay sales taxes, FICA and Medicare.as the chart shows, its only 12% of all income earned in this country - even if you do raise their taxes, its not going to significantly raise IRS revenues or lower anyone else s taxes. At 32,000 a year, there's not much left at the end of the month once you pay for shelter, transportation, health care and food. The current tax system definitely needs to be revised, but raising taxes on the bottom 50% will only put these people further in debt - I'd suspect most of them have more credit card debt than they can ever pay back. - whats the point of raising their taxes other than to get them to put some skin in the game? that's a more philosophical point for debate another time.
Posted by: Sam Kong at 12/17/2009 05:31:19 PM
Gross Adjusted Income does not include fees such as licensing of vehicles, boat registrations, speeding tickets, property taxes, gas tax, etc. These fees are a form of tax. If you take these into consideration then those below the top 10% are paying a higher percentage of their income to taxes. This just measures what we pay to the federal government. Which does not show a true picture of what a middle income person pays. If i'm in the middle income slot, why do I feel so poor. We pay too much taxes to a government owned by lobbyists.
Posted by: wiseguy at 12/17/2009 08:19:33 PM
In regard to jc's post: "In response to David's post . . ." Your comment is not a response to David's post. He asked a question, and you neither answered nor addressed his question. Instead, you respond with a question of your own and fail to explain how it is relevant.
Posted by: Erik at 12/18/2009 05:57:14 AM
Top 5% is Over $160,041. Is this household income? Or Individual?
Posted by: Chuck Quinn at 12/18/2009 06:36:58 AM
Excellent points about FICA, sales tax etc. "There are 3 kinds of lies - lies, damn lies and statistics" - Benjamin Disraeli.
Posted by: Bob at 12/18/2009 08:22:10 AM
As a retired person in that bottom 50% and looking at that 3% of the nation's tax burden in the above chart, it looks like I'm getting a break. But, as others have pointed out that doesn't include all the other taxes we pay. I recently tallied up all the taxes and fees that I could think of and my total taxes paid are nearing 50% of my income. Add to this that all my local and state taxes are going up next year along with about a 20% increase in fees. As healthcare, energy, insurance, and food costs continue to climb, more and more people will have no choice but to default on their debts. I don't see any economic recovery even possible for most of us. Jack up the cost of energy with this cap and trade nonsense and this current recession will seem like the good old days.
Posted by: Reginald Ross at 12/18/2009 09:47:40 AM
In response to JC's post, God only helps those who help thereselves. Also, the rich already takes care of the poor. The disproportionate amount of taxes we pay fund all the government assistance programs these "poor" families utilize. Food stamps, welfare, unemployment benefits, utility assistance, WIC, SNAP, TAN, Section 8, free clinics...need I go on? These are all subsidized by the government which receives a majority of there tax revenue from the top wage earners. In response to David, the current "administration" thinks the rich don't pay there fair share because of their socialist and communist tendencies....Google the "Global Poverty Act". It is a bill he co-authored that faciliates the Global REDISTRIBUTION OF WEALTH....If you people living on the bottom are so sick of it, go to school, find a new or 2nd job, start a business, do sidework etc. When I graduated college I lived close to the poverty level so I've been there. I worked hard for what I have and don't appreciate other people's undue sense of entitlement when they haven't put in the time and effort to improve their situation. There is ALWAYS something you can do to improve your financial or social standing...identify it and DO IT!
Posted by: Chuck Quinn at 12/18/2009 07:05:38 PM
The biggest chunks of the federal budget go to Social Security, Medicare and defense spending. Can't blame the poor for that.
Posted by: Nomen at 12/19/2009 11:02:50 AM
While I agree with some of Mr. Ross's comment, not all the poor are lazy. With all the wage pressure from outsourcing, unneeded H1b visas, and illegal workers, much of the middle class workforce will soon be forced down under the $32,879 average. While the admonition to go to school sounds good, there are many educated and skilled people looking for work right now. Being an unemployed engineer or computer specialist is getting more common every day. Spending $100,000+ for college to qualify for a $30,000 or less job is not a winning proposition. Only in the U.S. do our leaders show such disregard and disdain for their own working legal citizens. Big business has done an incredible PR job of shifting the blame for our economic woes to the supposedly overpaid American workforce. Under our current business policies, as the rich get richer it is only fair that they support the rest.
Posted by: monkeyfurball at 12/20/2009 10:31:50 PM
ricardo---if you look at the online calculator, it's AGI that you want, not just your salary. So, it's basically all income you are taxed on before deducting itemized deductions and personal exemptions. Well, I'm in the 1% that pays 40% of the taxes. Tell me, how does that ridiculous president of ours justify that we don't pay our fair share of taxes? He's an insult to America.
Posted by: Mike at 12/21/2009 09:36:56 AM
The "Percent of Income Taxes Paid" infers that you pay taxes on that portion of your income, not the total tax burden. That why it gets smaller as your income rises.
Posted by: davidb at 12/22/2009 09:51:05 AM
This proves how wrong the liberals are. America is not a pie where one piece takes away from another. It is a buffet. Your decisions as you go through the line affects how your plate looks at the end. Education and career choice are more important than how much your parents made. Stop whining and work.
Posted by: Fred at 12/22/2009 10:58:17 AM
A lot of people are arguing about whether or not the rich pay their "fair share" in taxes based on the above numbers. But the statistics in the chart above are not adequate to make such a determination. Just because the top 1% are paying 40% of the federal tax burden doesn't necessarily mean they are overpaying, or underpaying, their taxes. You'd have to know, in addition, what percentage of all income they receive, ie, Does the top 1% of earners receive 40% of all income, more than 40, or less than 40 -- and on down the list for each category. Then, you have to keep in mind that the numbers are skewed by the simple fact that the wealthiest people in this country have an elaborate system in place (Swiss bank accounts, etc.), to mask their income for tax purposes -- the hedge fund managers who make tens of millions but get to report the income as "carried interest" taxed at a measly 15%, etc. All reliable studies have shown that lowering the tax burden on the wealthy has two effects: 1) increasing the portion of all wealth that goes to the top 1% or 5%; and 2) increasing the whole economy's reliance on the financial services sector, which, as we have all seen in the last couple years, is a dangerous way to manage our society's wealth resources for the future. Therefore, I'd say, increasing taxes on the super-wealthy is good policy for two reasons: 1) To keep the US from becoming a third-world type economy, where the a small super-rich class eliminates the middle class by converting hard assets to financial assets (ie, shipping all manufacturing to Asia to cash in on cheap labor); and 2) To avoid having to reflate the big financial bubble every time it collapses.
Posted by: Barbara at 12/22/2009 11:02:08 AM
Welcome to China. By the time they get finished with us, we'll be just like the poor Chinese--overpopulated and underpaid. Where did America go? It's during our lifetime that we've opened borders, started trading with China, shopping at Wal-mart for bargains, killed the mom & pop stores where quality came first ant the customer was right, sent jobs overseas, brought in illegals to bring down our wage base and increase our welfare costs. It's our own fault. We let the rich and mighty take America away from the citizens.
Posted by: DonS at 12/22/2009 11:25:53 AM
I must be lucky, I am between 87% and 97% of income taxes paid. I would find it difficult to live on $32,000 and have anything. Oh, and Reginald Ross, I worked nights and attended College during the day to earn a B.S. degree. I also paid for it, not Daddy. We need to quit giving $BNs in aid, troops all over the world, and outsourcing every job possible.
Posted by: John at 12/22/2009 12:08:01 PM
I fall in the top 5 to 10 % depending on the year and see that I am in the segment of the population that pays a disproportionate share of our nation's taxes. I am not surprised but never knew the numbers. I have no problem with my current income tax bracket because I work in health care and see the effects of poverty and the effects of entitlement programs. I am a Republican as are most of my friends The typical arguments they have and that are voiced in previous comments usually refer to the evils of socialism, and how we are becoming a communist country, and how I work hard for my money and deserve to keep it, and people on welfare are lazy and should be made to work, etc., etc. The reality is that most of these people actually are quite out of touch with the people these programs serve and most have never experienced genuine poverty and have had little need for them. Of course there are people who abuse the system, but that can be said of the ultra-rich who run companies like AIG and then profit from corporate welfare. The point is everyone sees why they shouldn't be paying for programs that help other people, but the same people expect those benefits when they suit their own needs. I do believe ALL wage earners should pay some income tax because, as one submission put it before, you take more ownership of something when you have some skin in the game. I don't think the lowest wage earners should pay much at all, but even a token contribution adds some appreciation for what you receive back.
Posted by: Dan at 12/22/2009 01:19:24 PM
I'm not sure your readers have read your chart correctly. I determined that the chart shows what percentage of income / taxes were paid on. Is this correct? For instance one readers comments said earners in the top 5% paid 61% of the all taxes paid and the chart also says the top 50% of earners paid 97%?
Posted by: Dan at 12/22/2009 01:21:58 PM
The top 1% paid 23% of their income?
Posted by: DLN at 12/22/2009 02:57:56 PM
I keep reading all these comments about the top 5% paying 61% of all taxes paid, but when you consider the huge amounts of money the top 5% make, the taxes they actually pay are a drop in the bucket to them. Did you read what the government considers to actually be poverty in this country? I challenge just one of you to live on $11,201 for one year, that amount only, and see what it is like to live in that kind of hell. I am in the very bottom portion of the top 50%, and I can tell you, it is barely enough to live on while raising a child on my own. I don't know how some of these people are still alive on poverty level wages. In the meantime we see CEOs and top executives who have not actually done any "hard work" or been "productive" in years get millions in bonuses from companies who are downsizing their lower paid employees, you know, the ones who actually do all the work the upper execs take the credit for. And payroll taxes are apparently not being taken into account here, only federal income tax. When you consider the payroll tax is capped at $90,000, so all those making millions are paying the same amount of Social Security and Medicare tax as someone making $90,000 per year, that tends to lower the percentage of taxes they pay vs. us lower paid peons. I find it shameful that we live in the richest country in the world, but anytime anyone tries to do anything to benefit the biggest part of our citizens, selfish people everywhere start screaming "socialism!" That is, by the way, the same thing they were screaming back when social security and medicare were established, and where would most of our elderly people be today if we did not have them? There is nothing moral about a wealthy nation letting so many people fall through the cracks - doing without necessary healthcare, without enough to eat, without proper shelter. But why waste my breath, TRUE morality is a concept lost on most of you.
Posted by: Sharon at 12/22/2009 05:26:25 PM
Income is meaningless if cost of living in the geographic area where the income is earned is not included. Making $50k in Arkansas is far different than the same income in So. Cal.
Posted by: Jim at 12/22/2009 07:33:59 PM
A skewed chart if I ever saw one. It doesnt show the brackets. In other words, those who make between $33,000 and $66,000 only pay 10% of the taxes collected by the government. Someone needs to make a chart changing the type of numbers.......using average $$$ paid by each bracket instead of %, those figures will make you wince!!.
Posted by: kevin mccormally at 12/22/2009 08:46:33 PM
Kevin McCormally of Kiplinger here, with an answer for Dan. No, the top 1% don't pay 23% of their income in income taxes. They earn a total of 23% of all income reported on tax returns...and pay 40% of the taxes paid with those returns.
Posted by: TN at 12/22/2009 09:48:07 PM
DLN's got this right. Many Americans are blind sighted by greed and afraid of those that they perceive ready to take some of what they've got. We should all to check to see if we've got a pulse, because too many of us just don't seem to have a heart anymore.
Posted by: Richard at 12/22/2009 10:26:10 PM
The difficulty all of you have shown in understanding the chart as well as the tax system in general, is probably the best evidence that we need a flat tax. I firmly believe that if "everyone" had had skin in the game all these years, we would not have elected a marxist as president. God help us all.
Posted by: Debra Lombard at 12/22/2009 11:02:08 PM
Daniel...if you think that the Top 1% income category paid 40% of all tax monies going to the IRS then there would have been 40% + 61% + 71% + 87% + 97% + 3% for a TOTAL of 359% paid to the IRS. What they mean is that ONLY 40% of people in the Top 1% Income Category PAID their taxes whereas 97% of all people making between $66,532 and $32,878 did pay their taxes....
Posted by: Aldon Jarrett at 12/23/2009 01:25:40 AM
I see conservatives are as smart here as they are everywhere else and thats not very. First this is adjusted gross income, not total income earned. Secondly out of 100 people/dollars 1 person earns $23 and 50 people split $12. You can believe that hard work and productivity crap if you want, my experience is that the bottom 50 work lots harder than the top 1. Further the top 1 has $23 from which to pay taxes from while the bottom 50 have $0.24 to pay taxes from. The Factory owner makes a profit, the factory worker gets pay. Hugh difference when it comes to taxes. If only 16% have an agi of 113,000, a lot of consevative are only hoping to make that kind of income one day.
Posted by: dave at 12/23/2009 01:55:53 AM
If the rich think they have it so tough and are carrying too much of the weight of society then they need to give away all of their wealth and they can also live the life of the poor with all the government benefits that come with that life style.
Posted by: bob at 12/23/2009 11:37:50 AM
...I am skimping on everything at $41 000 income . I think the Govt.--the people - should turn off the lights on banks.
Posted by: Denis V at 12/23/2009 01:55:17 PM
Debra, you seem to be the one that would benefit most from continued schooling, not Dan or Dave. The chart DOES indicate that the top 1% of income earners pay 40% of the income taxes. Also, the top 5% (which includes the top 1%) of income earners pay 61% of the income tax burden... and so on. It has nothing to do with the percentage of people that paid their taxes. I know it seems crazy but its completely lopsided, which is what the chart is trying to demostrate. Rich people pay most of the taxes in this country, whether they find tax loopholes or not.
Posted by: shade at 12/23/2009 05:53:13 PM
A more revealing chart would be one that showed what % of discretionary income earners pay in income tax.
Posted by: escortrider at 12/23/2009 06:41:30 PM
I would never have believed that so many people make so little money if I hadn't read it in a credible source such as Kiplinger's. All the years I was a high school teacher I felt like I was part of the permanent underclass. I figured that doctors, lawyers, CPA's, and the like were "normal" people. But I guess not. Makes me thankful to have what I have.
Posted by: George at 12/28/2009 04:04:09 PM
Very misleading. You start off by saying that someone earning $ 35,000/year is in the top half of all tax payers. Usually when people think about what they earn they look at their entire salery. The numbers on the chart are based on Adjusted gross income. These numbers can be very different.
Posted by: jeepmonster01 at 12/28/2009 04:06:20 PM
if i'm making almost 60,000 and can't afford to pay for one of these new ($140,000) houses how are others doing it? these numbers cant be right
Posted by: Tom at 12/28/2009 04:36:05 PM
As a household, I am placed around the top 20% in AGI (approx $80k) and I am grateful to be in this standing. This outrage about how much the government and poor "take from me" is ridiculous. I predict my federal tax burden (not including FICA) is around $8000. After tax credits, it'll be even less. I live well, and my net worth is increasing. Its probably not something families in the lower 50% can say. I'd rather have my current quality of life over a lower tax bill.
Posted by: Top100 at 12/28/2009 04:41:30 PM
There is another study we should look at here. The percent of people responding who cannot interpret the chart. Debra Lombard, please have someone help you understand this chart.
Posted by: JR in TX at 12/28/2009 05:21:53 PM
Who knew everyone else made so little? I hope things improve soon!
Posted by: Thomas at 12/28/2009 05:41:59 PM
Too many people have no clue what Socialism is. It is succinctly put in the Gettysburg Address, as told by the first Republican President, Abraham Lincoln: "government of the people, by the people, for the people." *That* is what Socialism is all about (specifically, the working class, but overall everyone) - not allowing the elite and richest class(es) to rule the coop.
Posted by: Doree at 12/28/2009 06:14:55 PM
What really sucks is that the middle man who is barely making enough to make ends meet pays the most taxes. How the HELL is that fair?
Posted by: Doreen at 12/28/2009 06:22:40 PM
I can't believe people in the Top 1% are complaining about paying less than half the taxes that people in the Top 50% are paying! If I had as much money as you have I wouldn't have the nerve to complain. How dare you? If I had your money I'd just shut up and enjoy the good fortune you have to live a nice comfortable life where you don't have to wonder where your next meal is coming from or if you're going to have enough money to pay the rent or other necessities of life. I think it's criminal that some have so much while others barely survive. And let me stress that I BET I WORK JUST AS HARD AS THOSE IN THE Top 1% for my money - probably harder and that's what really chaps my hide to hear them whine about paying taxes. Money they NEVER EVEN MISS because they have so much it's nothing but chump change to them. Their taxes are more than my income - how screwed up is that!>?>>
Posted by: Chuck Okie at 12/28/2009 06:37:15 PM
The higher the income, the more likely it is to have: (i) "quality" tax attorneys and CPAs that maximize deductions from "interpretations" of the tax code, (ii) tax-exempt municipal bonds, (iii) long-term capital gains, and (iv) other other legal activities. All of these can significantly lower their taxable AGI relative to their actual, much-higher, total income. If you talk to any quality tax attorneys or CPAs and ask enough clarifying questions, you'll find that most people pay a much smaller percentage of their total income than they think they do. Most ofemotions, biases, prejudices, self-interest, etc. As a self-employed person for thirty years my annual income has ranged from the top 2-3% in some years down to the poverty level while supporting up to seven people for many years; the income varied but the work effort never did. When I earned the lowest amounts the stress was immense and I vowed I would never complain about paying taxes because that meant I was making enough money to take care of my obligations that include family, and yes, taxes. I am an American and with that privelege comes a responsibility: to help my fellow Americans who are less fortunate financially. And if one is religiously oriented, I suspect their religion is based upon the idea that they help their fellow men and women. Even the selfish need to occasionally remember that their income is a expense to others. However almost every analysis shows that people prefer emotions, biases, prejudices, self-interest, etc. over learning, thinking and the understandings that come from them. And no, I'm not a liberal.
Posted by: John Leverone at 12/28/2009 06:41:07 PM
I don't believe your statistics. $32,879 is the cutoff for 50%? Who are you counting? People on unemployment? High school and college kids working after class? People on Social Security and/or Pensions? My AGI of $81,000 probably puts me in the top 20%. I don't live like nor do I feel like someone in the top 20%. Another question I have is, the AGI is based on line 37 on the 1040 because there were 2 wage earners should I have used $40,500? Before you make these statement you should include all the particulars.
Posted by: Jim at 12/28/2009 07:29:04 PM
It is not so much what we make, but what we spend that is the bigger problem. Look at all the miscellaneous accessories that are not necessities that the low or middle income people have. Cell Phones, Ipods big screen tv's etc... It's ok to have all of this stuff as long as you can afford to pay for it.
Posted by: George at 12/28/2009 08:18:06 PM
We all know the only "fair" tax is one someone else pays. Kiplinger has put out the numbers just as they are. I've had years in which my adjusted gross income was less than half of what I actually brought in. Still interesting to see.
Posted by: Sam at 12/28/2009 09:10:20 PM
People act like it's some great surprise that the rich pay more in taxes. Do the math. For simplicity sake, one person makes 20k, the other 100k. Both are taxed 10%. Tax collected is 2k plus 10k for a total of 12k. The second person clearly pays more dollars. 10k/12k = 83%. The second person also paid a higher percentage of total tax collected. Even under a flat tax, the rich would contribute more dollars and thus a higher percentage of total tax collected. But everybody is contributing fairly (as a percentage of income) and all parties benefit equally from public schools, roads, policemen, etc.
Posted by: Karen at 12/28/2009 10:03:06 PM
to find out how your salary stacks up, Salary For.com has a huge database of real salaries that companies are paying for different positions as well as career advice and job listings. you can post your own salary or view others for free.
Posted by: storypeddler at 12/29/2009 01:26:19 AM
I listen to the arguments of people on both sides of this debate, but I have one question to ask. Why do we in America seem to feel the only life worth living is one supported by wealth and leisure? We live better than 90% of the world---even those in the bottom 10% live far, far better than the vast majority of people in Asia, Africa, South America, all the third world. People feel like if they say they worked hard for their money, that justifies their having wealth when half the children in the world go to bed hungry every night. I don't care who you are or how hard you work---it was only by the grace of God that you were born in America instead of Sudan or Mongolia or Haiti. Children work as hard there as anyone here does, and they do it for a scrap of bread, if that. This crap about "I worked hard for my mone"y is a straw man and a national shame. For crying out loud, when did accumulating vast wealth mean ANYTHING when you are on your deathbed? The American Dream of opportunity has long-since been hijacked by those soulless capitalists who place the only value in life on acquiring wealth. It's a disgrace on the name of America. God help us when we have let greed drive everything we say and do and believe. You ALWAYS reap what you sow. Maybe this recession is the first taste of that bitter harvest.
Posted by: rr at 12/29/2009 01:36:58 AM
the last column is only true if you accept the accounting fiction that social security and medicare are not income taxes. Include payroll taxes please for a more honest report.
Posted by: Ann Mastatoulo at 12/29/2009 02:15:29 AM
President Clevland never signed the Income Tax Bill. Income taxes aren't legal, just like the Federal Reserve is a private corporation. Its a con. The bottom 50% get CRA loans & are not reported on taxes, are at lower interest rates and are subsidized along with food, electric bills, medicine, childcare,...IF you are a certian type of person. Obviously, none of our tax money is going where they say it is or Social Security, Medicare etc. wouldn't be broke & we wouldn't be $68 trillion in debt to China. The democratic con of "assisting the poor" is to give them kibbles to retain votes and get grant money to fund non-profits (big profits & tax shelters for the Fortune 500- a.k.a. Astroturf for big business, Philanthropy Foundations, and politicians fat wallets. They aren't helping anyone to it but themselves. Its their job to keep them down. Regardless of any % of taxes paid, anyone making over $400,000 a year pays cash for homes, cars, etc at a discounted rate. They don't have debt and have more money to invest. Now, we know that the majority of democrats and Federal employees don't even pay taxes and people on government assistance don't pay either, but live off our paychecks. Since 1985, the cost of living has almost tripled, yet Fast Company magazine reports that the median income level has not changed in 25 years. Everyone can't be milionaires, but everyone does not have the ability to obtain a college degree or a high money making skill. The government intentionally holds salaries down to capitalize on social services. Its called Social Capitalism.
Posted by: Robert Saint at 12/29/2009 07:41:26 AM
So, based on the calculator, there are 140 million taxpayers, out of a 320 million population? I was expecting more, even considering elders and children.
Posted by: Rob McKay at 12/29/2009 10:21:08 AM
This should be broken down into real income and not arbitrary income levels. Cost of living varies greatly from state to state. $50,000 per year could buy much more in some areas than in others. People from high cost of living areas are actually paying much greater tax loads with the few dollars left over after the basics of life are purchased.
Posted by: hillary at 12/29/2009 10:50:15 AM
a person's income is in direct relation to serveral factors, mostly relating to who your parents are. "pulling ourselved up by our bootstraps" is a beautiful illusion that the upper class will forever try to impose upon the lower class. All this chart tells us is that the top 1% if footing 40% of the bill. But when you make $32,000 annually versus $320,000, 10% of $32,000 is $3200, and 10% of $320,000 is $32,000 (the salary of the bottom 50%!!!). Do the rich owe it to society to support the poor? maybe. But simply math tells us that it is relative. Especially when you consider the return on interest rates that the top earners are receiving. Getting rich is hard, (and by hard I mean that it is mostly a matter of chance) but once you are there, it's undeniably easy to expand your wealth.
Posted by: philip at 12/29/2009 03:23:44 PM
@jeepmonster01: I was able to buy a $115,000 house when I made $30K per year and supported a wife and two kids to boot, and gave 10% of my gross to charity. Everyone's situation is different. We lived very frugally in most regards. We drove older cars (no payments, low insurance), I did all car and home maintenance myself, bought food in bulk, used cloth diapers, etc. So maybe you could buy a 140K house on 60K income if you were determined to do so. Now I'm one of those CEO's who "hasn't done any work for years". Gahh. I've put up my own money, made personal loan guarantees, lived without income, partnered with others, and built a business. Let me tell you, it's a lot of work. On top of building the business, I work full time on one of our contracts doing billable work, yes work. My business provides jobs for nearly 20 people (very well paying based on that chart above). Maybe we should all quit whining and try to figure out how other folks contribute -- because most of us do.
Posted by: Brandon at 12/29/2009 04:20:21 PM
I love to see all of you fighting about who gets screwed! We all get screwed! I make in the bottom 50%. I have a college degree, I am a hard worker who doesn't complain at work and I have put in time. I haven't gotten a raise in two years but I have stayed loyal. Why, I don't know, because no one is giving that loyalty back to me. I have seen people with less time and that are less efficient get promotions and raises at my company because of who they are, not what they have done. But I guess sometimes that is the way the world works and I am sure that a lot of you have seen these things. But the fighting between liberal and conservatives and who has the right to wealth and its benefits has been going on for years with obviously no good answer. Really, inflation vs wage increases are way off and that is why we are in this predicament. Honestly, if we keep going the way we are and we have another round of rapid inflation from all of the stimulus money that has been printed and pumped into our economy (by both conservatives and liberals), say hello to third world conditions where only the wealthy will be able to afford milk. Then we all may be saying, OK we really need to re-evaluate how we pay people, and how much do people really need income wise. Because when we can't buy things, nobody wins.
Posted by: kevin mccormally at 12/29/2009 05:33:46 PM
Kevin McCormally of Kiplinger's here...with a response for George. You're correct that salary and AGI are different animals, but it's misleading to suggest that AGI is less than your full salary. It might be, but very often it's not...since AGI includes all sorts of other income in addition to your salary, including investment income, rental income, IRA distributions, alimony, self-employment income and the taxable portion of social security benefits (up to 85%). After you add any of that income to your salary, you subtract the adjustments, for things like alimony paid, IRA contributions, moving expenses, student loan interest if you're paying it, college tuition you're allowed to deduct, etc. AGI is a complicated figure but, I believe, a better measure for this purpose than salary.
Posted by: powdow at 12/29/2009 06:30:43 PM
I just love how the lib's cry when people with money don't want to give it away to people that made poor choices in life. THAT"S ONE REASON THEY HAVE MONEY IN THE FIRST PLACE! They made it and didn't spend it uselessly on consumer crap that doesn't, in turn, make them more money. It humors me to see some knuckle dragger win the lottery and blow it all on conusmer crap and start giving all away to their "friends", then end up on some talk show saying "Winning that lottery ruined my life!" You ruined it before you won the lottery, knucklehead. It just shows that some people weren't meant to be at the top of the food chain to begin with.
Posted by: steve d at 12/29/2009 09:11:29 PM
If the top earners have a problem paying too much tax, then they should make less money. The argument that you've worked hard and deserve all the money you make is true, in some cases. The problem is that the top 1 % of wage earners in this country are executives in companies. They are responsible for outsourcing jobs, which in general reduces tax revenue for our country and increases unemployment. Hey, top 1% ers, once in a while, step down off your perch and take a look at the people below you in the company. You know the ones making much less than you but the ones doing most of the productive work. Why do you deserve so much more than them? Is your brainstorming worth so much more than their physical labor? If you have to pick up their tax burden a little, is that so bad considering they earn a paltry wage compared to you?
Posted by: Mason Briggs at 12/30/2009 02:09:49 AM
Amazing how many people "just barely making it" not only have internet, but have time to post comments on kiplinger.
Posted by: lc at 12/30/2009 12:23:10 PM
Wealthy people do pay a lot more of our taxes and they often don't get the rewards of their work...uncle sam takes it all. Even if they can pay accountants. And yes, if they are stinking rich, they can afford the accountants to try to figure out other ways around the ever-more-complicated irs rules that keep trying to find ways to wrestle money away from people. It is a horror that our tax laws are so complex that money that could go to expanding jobs has to go to lawyers to help protect us from being eaten alive by taxes. The business owners I know are making more, keeping less and are struggling to keep from laying people off, working longer and longer hours looking for work. As for living on 33K per year, well, that is hugely difficult and requires a complete change of mind about how to live. I've been rich and I've been poor, and quality of life is possible on a minimal budget. You have to learn to take care of your health naturally (and with natural cures for even diabetes, this is possible, I've seen it...), learn how to become healthy apart from the medical system and mass produced foods, look at raw foods, look at organic, sustainable foods, look at energy medicine in its various versions...perhaps you will have to live in less convenient places, lower your expectations about transportation, and use your public library....You may need to take your home on the road and camp out...but even this can become an enriching adventure that leads to new opportunities. School is not an issue with all the information on homeschooling and computer/internet access available at public libraries...I'd rather see the tax situation change so that employers can afford to hire again, but until that happens, we've got to change our minds and change our lives to fit the reality we live in. Get into recession proof work like sewing, auto-repair, helping people to live on less and to build businesses that work for today's economy....We need to get out of debt and stay out of debt, and live within our means. We need to regain the freedoms that went down the toilet hidden in find print in most of the legislation that has been passed so far this year. Find the pioneer spirit within and go for it. Living on less is not only possible, but it can be exciting and freeing. ...Start connecting some dots your own self and become the smart, motivated person who gives value to others, and gets rewarded for it...And Aldon, you are only part right when you say that the people who earn the least work the hardest. Every entrepreneur/job maker I know works at least 50-75 hours a week, which lowers their hourly pay considerably, and their work is often more brain work than back-breaking - though no one seems immune to computer related injuries, lol...The handful of independently rich people are in no way representative of the front-line entrepreneur and job-maker in the American economy. The ones I know donate both time and money, generously, to good causes and to their extended family members who are in financial trouble.
Posted by: Emily at 12/30/2009 01:22:40 PM
Bet you're sorry you posted THAT chart!
Posted by: Em at 12/30/2009 03:32:34 PM
About time the truth gets told. Unfortunately the PC media will not even report on this, both left and right leaning. I have always known that I pay the most in taxes as an individual. What with the tax increase from the stimulus, yes my taxes went up $5,100+ and I make $34,500. I have the pay check printouts to prove it; the individual is the most taxed while families are the least tax. IF I count my local taxes, would put my tax rate at 130% of taxes paid into both governments. Sorry PC groups, fact is I am paying for all the goodies you receive from government.
Posted by: philip at 12/30/2009 03:58:53 PM
To Kevin McCormally, Could you clarify your source data? If the data is drawn from 2007 tax returns, then the number of earners represented is higher than the number of returns due to joint filings. Are the AGI's referred to combined incomes of couples as well as incomes of individuals? So an "income" of 113,018 may represent two jobs totalling that much, or one job plus a secondary income from the same person. And a good portion of the lower 50% could be kids and retirees who make enough to have to file but not enough to live on full time by itself. It would be more useful to analyse only the returns of those who are truly "working adults." 2008 population estimates show over 121million people under 19 or over 65. How many of them have to file a return? If my Dad retired with a million dollars in the bank but only two thousand a month in income, he could be living high on the hog, but this data analysis would show him as poor. So do the numbers really mean what you think they mean?
Posted by: Roger at 12/30/2009 04:05:13 PM
All of you in the top 10% of income earners who whine about paying taxes, especially taxes used for entitlements don't have a clue about the struggles of poverty. Much poverty isn't related to laziness but to uncontrollable circumstances. I grew up in a poverty stricken home in a government supported housing project. We rarely had meat for the dinner table - most often dinner was limited to beans and potatoes. There were times us kids were unable to attend school for lack of shoes to wear. My mother who raised three of us kids worked six days a week for minimum wage. My father rarely paid child support or showed any interest about our well being. Without low income entitlement assistance we would not have survived. I'm now 66 y/o and my yearly income is about $65,000/year. However the expenses of living on Long Island don't leave much room for discretionary spending. Still with the memories of my childhood I made a donation over the holidays to a charity that helps hungry children. If all of you who resent your taxes being used to help the needy were to spend a year in their shoes you might finish that time with a different viewpoint. Happy holidays to all.
Posted by: Tom at 12/30/2009 05:41:23 PM
well said, Philip: "Maybe we should all quit whining and try to figure out how other folks contribute -- because most of us do."
Posted by: Heather Franek at 12/31/2009 10:38:41 AM
It is sad that Kiplinger has just decided to use this article as a political plank to promote the idea that poor people should pay more taxes. They do not even bother to break down the percentages of those individuals earning less than $32,000. My adjusted gross income is $13,489 and yes, that is BEFORE I pay taxes. The reason people at my income level cannot be charged more in taxes is because, if we were charged the 31% that people in the top bracket pay (not including Social Security and Medicare, which are paid by all income earners at the same rate), we would have nothing left to live on - in my case, at that tax bracket and my current income, I would take home barely $700 per month. If you want the lower class in this country to pay a higher percentage of taxes, do the obvious thing and PAY YOUR LOWEST PAID EMPLOYEES HIGHER SALARIES. Stop whining about your godawful pain at not being able to buy a yacht and do the math instead.
Posted by: tom at 01/03/2010 08:47:05 AM
Having watched the discussion, I find the posts illuminate how little the general public understands either finance or mathematics (what is AGI). I also note that the posters generally don't post their own bracket information. This leads one to conclude that a) their income is in the upper bracket, or b) they think they will be in the upper bracket some day or c) they are not in an upper bracket. Of all the groups, only those in group (a) actually are affected by the higher taxes at higher brackets. In the interest of full disclosure, we fall in the top 10% and are glad to pay our taxes. We did not need and did not want the tax cuts put in place earlier in the decade and have since donated all our "tax cut" savings to the poor. Taxes are what we pay for civilization. Secondly, as one poster so succinctly put it, almost all the federal dollars paid out go to entitlement programs (SS, Medicare), the national debt interest, and defense. What comes out is that any Congress and administration whether Democrat or Republican, determines where to allocate less than 20% of the total federal budget. As to our tax rate being too high in general, just look at any other industrialized country in the world. We in the US pay a pittance compared to other countries.
Posted by: jack at 01/04/2010 12:33:37 AM
If you are in the top 1%, it does not exclude you from also being in the top 5%. If you are in the top 5% it does not exclude you from also being in the top 50%. Hope this helps.
Posted by: Sharon Hopper at 01/05/2010 01:21:42 PM
The Bible may say that the rich should take care of the poor and I believe that we do that in this country for all who have the gumption to do the paperwork and meet the requirements. For the rest they need to quit being so complacent and work harder. This is the land of opportunity and I think that the Bible also says that a man should work for his pay and apply his talents to improving life to those around us. Give a man a fish and he wil have one meal. Teach a man to fish and he can eat for a lifetime. It is time to quite trying to give everything to those who do nothing or want nothig for themselves. You can charge very little for health care and I guarentee that many will not want it anyway. They simply will not pay for it. So we need to be far more realistic in our expectations. Sharon Hopp[er 01/05/2010
Posted by: Tim at 01/05/2010 07:03:46 PM
What people fail to realize is this. Most people who make below $40,000 per year get a tax refund. Last year I made $34,000, got all the taxes I paid through the year back, and then some with the earned income credit. Hate to say it, but the rich do pay the biggest percent.
Posted by: Jobyone at 01/07/2010 08:34:20 AM
If you want an example of how it is possible to live on less than $11000, check out the earlyretirementextreme blog. This guy lives on about $6000 a year in San Francisco CA. While I do not want his life, it is proof to me that we all make choices. Those choices effect how we live. You do not have to have a cell phone, cable, internet, a big flat screen TV, or a leased car. You do not have to spend money eating out, smoking or alcohol. All of these are a choice. You make choices. These choices effect your life. My income puts me around the top 25% of earners but my wife and I live on an amount equivelent the 50% mark. We appear to live a much poorer life than most in our situation. We choose to save and not go into debt. We don't have a McMansion and a leased BMW big screen TV or expensive toys. This is my choice. You must make yours. Just stop blaming other people for yours and take ownership of your choices.
Posted by: Jack at 02/02/2010 09:55:59 AM
Unofortunately, for this to change it is going to require people that make a larger income to actually stand up and unite for this to change. Not sure that is going to happen. I don't have a problem in paying more taxes if my income increases. But, I want EVERYONE to pay something... Instead of getting more back than they paid-in. That is a negative income tax rate. I have a HUGE problem with that... If everyone paid something it would be more fair and they would actually appreciate more !!!!!!
Posted by: Tyree at 02/02/2010 08:52:47 PM
As a person that is in the top 10% of income earners I would just like to say that I have no problem with my tax burden as compared with someone in the bottom 50%. Guess it's because I grew up below the poverty line, and since being on my own at 19 I've gone from making less than 20K a year to over 100k. I know how hard it is to survive on that little amound of money, and I also kow how easy to survive on the money I have now. As someone has already stated, increasing the percentage of income that goes towards taxes on people that make that little amount doesn't increase the amount of money government gets in any significant way, but it DOES significantly hurt those people that are struggling as it is just to survive. So please, increase my taxes. I'm sure I will more than survive just fine.
Posted by: Dan at 02/03/2010 03:25:09 AM
Am I missing something? What this chart is showing is that the middle class, not the rich, are carrying the tax burden in this country. Hard working people are not defined by how much you have in the bank. People that are fortunate to strike it rich should enjoy it but in a rich country like ours basics like health care shouldn't be a privilege but a right. Corporate America is shipping jobs overseas to the detriment of many and it profits very few. It is sad to see what we have become. The rich in this country are clearly for shipping more manufacturing, engineering....jobs overseas for cheap labor so they can widen the gap between the average worker and top executives. Then they focus on the dollar amount they pay ignoring the % of their income they pay in taxes.
Posted by: lisa at 02/04/2010 05:22:33 PM
I am curious. Are any of the people ranting about the fact that the rich pay more than their share ACTUALLY rich themselves(?)...
Posted by: Where's Ronnie at 02/11/2010 08:42:00 PM
There's hand ups and then there's hand outs. Give a guy a hand up and he'll learn to do for himself. Give'm a hand out and he'll be back looking for more and have ZERO appreciation for it...You can see by the chart who's getting the hand outs...
Posted by: Lee at 02/12/2010 04:02:05 AM
It is important to consider cost of living when discussing income. A person making $20,000 in a less expensive part of the country may be able to survive better economically than someone living in a more expensive part of the country (such as San Francisco).
Posted by: Tyler at 02/17/2010 05:54:39 PM
I currently make less than 33K a year. I am a full time student and a full time worker. I manage to live on less than 33K a year because I live within my means. People think they can't live on that amount and should be given more, but aren't willing to give up the unnecessary items to live comfortably. People think they are ENTITLED to many things, but dont' realize that most of those items weren't around 20, even 10 years ago and people some how were able to survive just fine then. The nation needs to realign their image of what is NECESSARY.
Posted by: Tyler at 02/17/2010 05:58:27 PM
I also wanted to suggest that those that make less than, say, 30K / year. To live what you consider "comfortably" sometimes means you have to share a place with 2 or 3 other people. Combine your efforts with friends and family for a few years and if all of you save, guess what, you can slowly move up to a more comfortable life style. People whine because they can't afford to live on their own, and pay their bills and cell phone costs and go out to eat and drink. Sometimes you have to work a little harder and pay the piper for a few years before it gets easier...stop living in the NOW mentality.
Posted by: Kelly at 03/01/2010 09:27:23 AM
What does the column, "Percent of all Income" mean?
Posted by: James at 03/04/2010 02:01:41 AM
I fall in the Bottom 50%. I live basicly and barely get by most of the time. In my oppinion everyone is doing their part except for the government. They spend all of our taxes on god knows what...and call it a false tax or fee. I feel the only way we will see change is not through more $7.00 an hour jobs but through better leadership in our government. I thought government is made for the people, instead of their precious gov. jobs. I say we should put their income levels down to the bottom 50% and see how they live with their present day bills.
Posted by: Sharon at 03/04/2010 02:49:35 AM
Poitics aside it is the 80/20 rule. The top 20% of wage earners pay 80% of the taxes, and the top 20% earn 80% of the income. 80% of the bottom 50% of earners either live at home with Mom and Dad, are Seniors, or under priveleged. If more of the top 20% would start small businesses a lot of the discussion below would be moot. People who know how to make money will continue to do so, but if they can create more jobs along the way it will strengthen our economy and make life more enjoyable for everyone. Large companies are draining the life out of their workers during this recession, refusing to increase their work forces and squeezing the most over worked work force in the first world, even they are not already off shore searching for the next slave wage market. Don't envy the top wage earners too much. You might get what you wish for.... an 80 hour work week! We deserve to make more - all we do is work. Taxes suck, but it beats making $32K a year to get an Earned Income Credit and not being able to feed your family without visiting a food pantry. Divided we fall...
Posted by: mick at 03/04/2010 11:34:48 AM
Debra Lombard...you obviously have no idea how to read the chart yourself....