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Not in the top 1%? Just where in the 99% are you?

An income of $343,927 puts you into the top 1%. If you make $32,396 a year, you're in the top 50% of wage earners. Check how much each group pays in taxes.

By MSN Money Partner Dec 14, 2011 11:44AM
This post is from Kevin McCormally of Kiplinger's Personal Finance magazine.

 

In the two years since the end of the Great Recession in June 2009, the inflation-adjusted median income of American families has fallen 6.7%, to just under $50,000.

 

And this comes in the shadow of a government bailout of big banks and a return to the days of gigantic bonuses on Wall Street. Mix in stubbornly high unemployment, a volatile stock market and a barely recovering economy, and it's no wonder that anger over the causes and consequences of the financial meltdown is packing presidential debates with heated rhetoric and filling the streets with protestors.

 

Undoubtedly, there are big issues here. And we think it’s important for you to know where you fit in. Does your income put you in that at once extolled and excoriated 1% of richest Americans? In the bottom 50%? Somewhere in between?

 

And, while Warren Buffett says he thinks rich folks like himself should pay more taxes -- and President Barack Obama would be glad to oblige with a millionaire surtax -- one-time Republican presidential candidate Herman Cain had called for throwing out the tax code altogether and replacing it with a 9% flat tax on individuals, a 9% corporate tax and a 9% national sales tax.

 

It makes you wonder: Are you bearing your fair share of the nation’s tax burden? Do you have a clue what portion you pay now?

 

Post continues below video.

 

 

To help answer such questions, the folks at Kiplinger developed a tool to show how the nation's taxable income and the country’s tax bill are distributed among its citizens. Are the wealthy coddled with tax favors? Is the middle class unfairly burdened? The tool uses the latest Internal Revenue Service data to shine a bright light into what are too often murky shadows. You can also use it to see how your own income stacks up with that of your fellow Americans.

 

Are you ready to see where you fit in? With this simple calculator, enter a single number from your 2010 tax return and you’ll instantly know the answer.

 

The latest numbers from the IRS -- based on 2009 tax returns -- show what it takes to be among the top 1% of income earners: adjusted gross income of $343,927 or more. The 1.4 million Americans with this elite status reported 16.9% of all the country’s taxable income.

 

That’s right. One percent of taxpayers reported almost 17% of all taxable income. But that same tiny group also kicked in 37% of all the taxes paid. How much do you need to make to be in the top 50% of earners? Just $32,396.

 

Fall below that level and you are in the bottom half, along with nearly 70 million of your fellow taxpayers. All told, that group earned just 13% of the income reported on 2009 tax returns. And they coughed up 2.25% of all the income taxes paid.

 

Our income and tax-burden breakdowns come from information reported on 2009 individual income tax returns. Income categories are based on adjusted gross income.

 

(Note that these figures include only federal income taxes. According to one study, more than half of all wage earners pay more in Social Security and Medicare taxes than they do income tax. The percentage of those paying more payroll tax than income tax soars to nearly 90% if you count both the employer and employee share of those levies.)

 

For historical perspective, back in 1986, the top 1% of earners reported 11% of all income and paid 26% of the income taxes; the lower-earning 50% made 17% of the

income and paid 6% of the nation’s individual income tax bill.

 

You can see a chart here of the breakdown of income and taxes paid by category.

 

More from Kiplinger and MSN Money:

 

VIDEO ON MSN MONEY

13Comments
Dec 18, 2011 12:38AM
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I thought this article would tell me "Just where in the 99% are you?.  It didn't.  It tells me if I make more than $343,927 I would be in the top 1%. If I make $32,396 a year, you're in the top 50% of wage earners.  Anywhere else, no answers.  How about a Pareto Chart showing the top 10%, 20%, 30%, and so on.  I wish I wouldn't have wasted my time reading this article hoping for the answer that its title promised but never provided.

Dec 17, 2011 9:49PM
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Does it really matter where I am except that I live comfortably as do 99% of Americans though most are led to believe differently.  I did a lot of work in HUD housing and saw no poor people.  We are a giving nation helping each other.  Merry Christmas.

  Boy will i get blasted for this.

Dec 15, 2011 7:13PM
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I'm in that 1% number based on the above story, but I paid in about 45% of my income to Federal and State income taxes.  My State tax rate is 8%, so I suppose that's logical.  Sucks, but its logical.

Dec 19, 2011 5:32PM
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There are less than 140 million taxpayers in a nation of over 330 million?   I would have expected more like 200 million taxpayers and here's why:

The population pyramid of the US is really a column now, meaning that the population of each individual age group is about the same (excluding pre-baby boomers, who are represented in far fewer numbers).  So, 0-16 year olds probably represent no more than 20% of the population.  At the other end, retirees also probably represent no more than 20% of the population.  That is 130 million people max that are not elegible to work.  That means than OVER 60 million people of prime age are not paying an income tax from working!  Some of the possible reasons why they are not paying are obvious: unemployed (although unemployment compensation is taxable, so if you are collecting, you are a taxpayer and not part of this group), or a full-time, non-working student.  Perhaps you collect disability SSI (whether truly disabled (most) or working the system.  Another possibility is that you are earning money for working, but it is under the table.  Either way, what a mess.  We shouldn't have 60 million people between 16-65 years old not filing taxes each year!

Dec 18, 2011 3:06PM
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You have to go to the calculator page link to find out.

It told me that I was in the top 25%. If I am in the top 25%, I sure don't feel like it. I would hate to see how the bottom 25% survives.Eye-rolling

Dec 21, 2011 7:17PM
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Please stop confusing taxes with forms of withholding. If they take $5,000 from you, and give it back in April, you didn't pay any taxes.
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September 11.......

 

If I read your post correctly you are not counting those of us over 65 as taxpayers. For your information a very large segment of the population over age 65 are active taxpayers. My wife and I are both age 75 and our federal income tax bill for tax year 2010 was over $22,000.00. One of the few breaks we got was 15% ($3,450) of our $23,000 of social security was not taxable; however, the other 85% ($19,550) was taxed at 28%. For the $23,000 we received in social security benefits we gave 23.8% ($5,475) back as federal income tax.

Dec 16, 2011 11:53PM
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pocketprotector, First congrats on being in the top 1%. It seems to me that you are certainly paying your fair share. Given all the noise we hear about how your group creates all the jobs, I am curious what your position would be to give tax credits for real jobs created rather than a blanket benefit of  "no new taxes on the rich because everyone in that group creates jobs". If your overall tax rate was increased or decreased by say 3%, would it change your incentive to create jobs? How many people do you employ? I am just trying to better understand this argument as it pertains to real people as I am not sure I buy in to all the rhetoric.
Dec 19, 2011 10:24AM
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Another ranking tool that doesn't take geography into account. I live in a high-priced region of the country and have no doubt that there are people making less in lower-priced areas that are living "richer" than I am.
Dec 21, 2011 7:13PM
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I'm in the 57% who pay taxes. Stop lumping me in with the 47% who don't. There is no 99%. If it's us vs them, they automatically lose because, without us, there'd be nobody to fund their Food Stamps.
Jan 6, 2012 6:52PM
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Maybe people that cannot afford to have children need to stop having them. Bad and irresponsible behavior should stop being rewarded. EVERYONE should pay income tax at the same rate. No deductions or credits for anything. Why should someone get a tax break for having kids? Totally crazy.  The IRS should be abolished. A Federal consumption tax should replace it. EVERYTHING purchased will be taxed at point of sale. This collects tax from those that make unreported cash and those will illegal unreported incomes. The amount collected this way would probably double the amount of tax currently collected. It is time the bottom 50% started paying taxes like the rest of us. And I don't care if your income is $100 a  year... you should be taxed on it.
Jan 6, 2012 7:10PM
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and before the amateur CPAs start complaining about my no state and local comment -- you only get them as part of itemized IF you itemize deductions and if those itemized exceed standard deductions.  So it's a matter of perspective.  Many, many americans do not have enough itemized even with state and local paid to take a deduction.  So, they paid MORE.

 

The true point is, there are a whole lot at the top who have an effective tax rate of 0 and there are a lot at the bottom who have an effective tax rate of 0.  In the middle, you foot the bill.

Jan 6, 2012 7:03PM
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Please stop confusing taxes with forms of withholding. If they take $5,000 from you, and give it back in April, you didn't pay any taxes.

Please stop confusing tax refunds with "paying no tax." 

 

Get your pay advice out.  "So Sec Tax" and "Medicare Tax"  are deducted from gross pay off the top.  For "Fed Inc Tax" deducted from gross you may get a refund of some or all (unusual) paid.  If you had 5k total withheld, unless you are very, very good or cheating, you don't get 5k back.  A portion went to SS and Medicare off the top.  And if you are paying in only 5k and getting all 5k back, you are likely paying CPAs and Esqs a lot more than 5k to get there.  Note, however, that this IS how GE pays a 0% effective tax rate (yes, I just switched terms).  Get out your 1040.  Look down the columns, Income, Adjusted Gross Income (after exclusions), Tax and Credits (deductions) and Other Taxes (note no line for deducting state income taxes, local taxes or sales taxes -- these are paid and off the "top".  Now look at Payments.  Line 61, Federal Income Tax Withheld -- it's NOT federal, state, local, sales, SS and Medicare withheld.   If you had 5k in line 61 and 5k in line 72 "Overpaid"  (nice IRS logic -- but refund to those part of the human race), congrats!  You did well.  But you didn't "pay no taxes."   (yes a double negative -- for effect)

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