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2011 Income Percentiles

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Every year, following tax season, the Tax Policy Center releases a litany of statistic driven tables and charts. One of the most fascinating, at least to me, is their listing of Income Breaks. The table basically lists where all the percentiles start and end for all tax units, single filers, married filing jointly, and head of household filers based on their models. This is just one of the many charts they have for 2011. It’s not an exact science and you can argue the accuracy of the models but it’s still an interesting dataset to play with.

Here are the deciles (dollar value for when that decile ends):

Decile All Single MFJ Head of Household
10th $9,235 $5,068 $23,748 $8,614
9th $16,358 $8,294 $37,621 $12,935
8th $23,873 $11,338 $48,695 $16,943
7th $32,188 $15,188 $64,228 $20,245
6th $42,327 $19,092 $74,607 $25,583
5th $57,213 $25,102 $90,473 $29,562
4th $73,866 $32,245 $105,552 $35,987
3rd $97,298 $41,840 $145,454 $44,203
2nd $154,131 $64,858 $191,126 $63,274
1st, 2nd half $200,026 $87,149 $298,736 $77,703

Here were some things that intrigued me:

  • I tried putting that data into a chart but it looks absurd. It’s a long flat line with a little growth until you hit around 95%, then it skyrockets. 99.5% to 99.9% is an almost vertical line. Not surprising since the breaks, for all tax units, is half a million dollars at 99%, 815k at 99.5% and then two million for 99.9%.
  • The 2011 poverty level is at $10,890 for an individual, which puts 27-28% of single filers under the poverty line.
  • Half of all tax payers earn less than $42,437.
  • The first 3% of single filing tax payers earned no income.
  • The income breaks for MFJ are always bigger than two times the levels for single filers (and even all tax units).
  • Earning six figures puts you in the top 19%% of all tax units, the top 5% of single filers, and just the top 32% of married filing jointly.
  • To give you an idea how much money the 99.9% folks make, it would take 13.4 years for a taxpayer in the 90th percentile of all tax units to earn the same amount (dollar value for the 99.9 divided by the dollar value for 90). The other ratios are 11.65 years for single filers, 15.68 years for married filing jointly, and a mere 7.89 years for head of households.

Finally, check out this average effective federal tax rate chart that lists the tax rates on the various income groups and filing statuses. I’ll let you draw your own conclusions (again, this data is based on their microsimulation model).

{ 8 comments, please add your thoughts now! }

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8 Responses to “2011 Income Percentiles”

  1. mannymacho says:

    That’s probably about where I would have guessed things to be…not too many surprises there. Still is very interesting to look at, though!

  2. Kristy says:

    My husband and I made just under $30k last year. I knew we were poorer than our friends… but I didn’t think we were in the bottom 20% of married taxpayers! That’s downright shocking.

  3. Adam says:

    It will be interesting to watch these numbers as inflation increases, which will significantly diminish individual spending power.

  4. Fat Bob says:

    Are these numbers AGI or gross income?

  5. Interesting. Apparently the government considers me to be doing better than I thought I was.

    It’s funny how the poverty line here in america is at $10,890 for an individual when there are many families in countries around the world that could live on that for a year. Just goes to show the differences in financial situations around the globe.

    • uclalien says:

      It’s really hard to compare purchasing power across nations, but the charts in the link below attempts to do so. It shows just how wealthy we are here in the US. Some interesting observations:

      1) All the countries near the top are pretty small (population-wise), with the exception of the US.

      2) Purchasing power in the US is roughly 30% greater than the most financially well-off large country in Europe, Germany.

      3) Purchasing power in the US is roughly 6x that of China.

      http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita

  6. Kenny says:

    There are some shocking numbers in here, but the trending is downwards.

    The low end is almost the same as previous years, and the high end has come down a bit.

    I am in the higher end of the bracket considering MFJ, but that also means that I pay taxes more than 5th decile pays. Can you imagine that point?

    There are people who do not make a total of what the government charges us. Sure, it seems like a small % to the total income, and I am grateful for where we are, but when the govt is abusing the money we are paying, it really hurts.

    I would rather have the taxes go to targeted program that helps people boost their incomes in the US with 2nd and 3rd jobs, as opposed to our own sons/daughters protecting the streets of Iraq and Afghan.

    Based on history, when govt spending is focused on external countries, it shows that the country is about to give up the ‘power’ status.

    Therefore, we should all hunker down, save the most we can and brace for the hard times that around the corner.

    Kenny

  7. skylog says:

    it is interesting to see this. it is somewhat shocking that 27% of single filers are below the poverty line. i never would have guessed the number would have been that high.


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