YOUR MONEY
CREDIT, COLLEGE, TAXES AND REAL ESTATE
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The idea of keeping up with the Joneses is so 1950s. And forget the Carnegies, the Rockefellers and the Vanderbilts. These days, we want to keep up with the Gateses and the Buffetts, the Allens and the Waltons.
So maybe that's a stretch. But do you ever wonder how your income stacks up against your fellow citizens?
The most recent data show that an income of $30,881 or more puts you in the top half of the class. Earning about twice that much -- $62,068 -- earns you a spot among the top 25% of all wage earners. You crack the elite top 10% if you earn more than $103,912.
And $364,657 buys top bragging rights: Earn that much or more and you're among the top 1% of all American earners. Together, the top 1% earn a full 21% of the income reported to the IRS -- far more than the 13% of total income reported by the bottom 50% of earners.
Here's another powerful statistic about the top 1% of earners: They pay a whopping 39% of all federal income taxes. The bottom 50% pay just 3% of all income taxes.
Income here is defined as adjusted gross income (AGI) reported on income tax returns. AGI is basically salary plus investment, rental and business income minus investment losses and expenses such as alimony paid, contributions to retirement plans, moving expenses and a few other costs.
These statistics come from data based on 2005 tax returns, the latest available, and do not distinguish between single and joint returns. (Note that these figures focus on income taxes and do not include Social Security taxes. Lower-earning taxpayers pay a far higher percentage of their income in Social Security taxes than in income taxes.)
How does your income stack up? What percentage of the nation's tax burden falls on your shoulders? Kiplinger has developed an on-line calculator to instantly deliver the answers. So try our calculator and find out.
The following table shows the income categories, the percentage of income earned by earners in that category and tax burden carried by members of that category.
| BREAKDOWN OF INCOME AND TAXES PAID BY CATEGORY | |||||||||
| Income Category | 2005 AGI | Percent of all income | Percent of income taxes paid | ||||||
| Top 1% | Over $364,657 | 21% | 39% | ||||||
| Top 5% | Over $145,283 | 36% | 60% | ||||||
| Top 10% | Over $103,912 | 46% | 70% | ||||||
| Top 25% | Over $62,068 | 68% | 86% | ||||||
| Top 50% | Over $30,881 | 87% | 97% | ||||||
| Bottom 50% | Under $30,882 | 13% | 3% | ||||||
Source: IRS
