The 2% Illusion
I was curious to see how they arrived at the numbers for this article, given there are no citations. I found the table they were using:
Unfortunately, this table is only for taxpayers who filed itemized returns. From the opinion piece:
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts.To arrive at $522B they took rows 26:32
To arrive at 62% they divided this number by $837B, once again this is only for itemized returns. One clue that might have tipped them off (they were looking at a subset) would be that there are only 42 million returns on this table for a country of over 300 million people.
Perhaps most bizarre is their claim that 7% of returns report more than $200k/yr. I don't understand how this number got past them.
The total for all returns (standard and itemized) can be found on
Using the correct table:
- The total income tax collected is $1.023T, not $837B. ($1,023,920,139)
- The total income tax collected by households making more than $200k is $544B, not $522B ($544,318,726)
- The percentage of receipts collected by rich households is roughly 53%, not 62%.
- Finally, the percentage of returns with income >$200k is 2.9%, not 7% (wow)
Even stranger, I've learned that some rich people actually take the standard deduction! In fact, 244 of the 15956 households making more than $10M in income decided it was not worth itemizing in TY2006.