The share of income taxes paid by the top half of taxpayers reached its highest level in decades according to a report from the Joint Economic Committee.
According to figures supplied by the Internal Revenue Service, the top half of taxpayers ranked by income paid 96.70 percent of the individual income taxes paid in 2004, compared to 86.05 percent in 1949, 89.35 percent in 1959 and 90.27 percent in 1969.
The top 1 percent of tax filers paid 36.89 percent of 2004 income taxes, while the top 10 percent accounted for more than two-thirds (68.19 percent) of those taxes. At least part of the increase in taxes paid by the higher percentile may be related to higher capital gains following the reduction of the capital gains tax rate in 2003.
The share of income taxes paid by the top half increased from 96.54 percent in 2003 to 96.7 percent in 2004. The share of income taxes paid by the bottom half declined from 3.46 percent to 3.3 percent. In 1949, the income tax burden of the bottom half was 13.95 percent.
“The new IRS data confirm once again that the tax burden is disproportionately borne by taxpayers in the top half,” said Rep. Jim Saxton, R-N.J., chair of the Joint Economic Committee, who added that the recently released data “should be at the center of any future debate about tax policy.”
