In naïve celebration of Tax Day

David MoonBlog

About the time I graduated from college and got my first job at which I didn’t sweat or risk actual physical injury, I promised that I would never be upset about paying taxes. If I paid taxes, it meant that I had income – and I was tired of being poor.

What a naïve young’un I was.

In celebration of the April 18 due date of your federal tax return, here are some statistics about who pays taxes, along with how much they earn and pay.

In 2020 (the most recent year for which detailed figures are available), Americans filed 164.4 million individual tax returns. Of those returns, 75.1 million filers paid no federal income tax. The Tax Foundation estimates that another 32 million households filed no return in 2020, meaning that 107 million filers (60% of households) paid no 2020 federal income tax.

The median adjusted gross income (AGI) amount was $42,184; anything above that figure places you in the top half of taxpayers. If your family’s income exceeded $85,853, you made more money than 75% of filers. This group of taxpayers paid 88.5% of all personal income taxes paid in 2020, up from 84% in 2000 and 74% when little naïve Dave graduated from college in 1985.

In 2020, the bottom half of taxpayers earned 10% of all income in the U.S. This group paid 2.3% of all taxes in 2020, down from 7% in 1985 and 3.9% in 2000.

The share of taxes paid by the top earning taxpayers has continued to increase – and at a pace faster than their growth in their share of the total income earned within each high-income category.

The top 10% of taxpayers (AGI above $152,000) paid 74% of all personal income taxes in 2020, up from 67% in 2020.

The increase in the share of taxes paid is even larger as we examine higher income groups. If you made $548,000 in 2020, you were among the top 1% of all taxpayers. This group paid 42% of all income taxes that year, up from 37% in 2000 and almost twice the 22% of total taxes they paid back in my naïve mid-1980s college days.

What about the super-duper uber wealthy? In 2020, there were only 157,500 taxpayers with AGI in excess of $2.6 million. This group of taxpayers – about the attendance at the 2016 Tennessee-Virginia Tech football game in Bristol – paid 22% of all personal income taxes collected in 2020, up from 16% in 2000.

All data in this column is from the 2020 Internal Revenue Service Statistics of Income report.

David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.