Q: What percentage of the U.S. population makes more than $250,000 per year?
A: Roughly one in 50 households will take in more than $250,000 next year.
What percentage of the U.S. population makes over $200,000 and $250,000 per year? What percentage of the total tax revenues do those groups currently pay?
This question is prompted by the April 16 debate between Sens. Barack Obama and Hillary Clinton. They made some specific promises not to raise taxes on anyone but high-income taxpayers. Specifically:
Clinton: I am absolutely committed to not raising a single tax on middle class Americans, people making less than $250,000 a year. …
George Stephanopoulos: [to Obama] Would you take the same pledge?
Obama: Well, I not only have pledged not to raise their taxes, I’ve been the first candidate in this race to specifically say I would cut their taxes. …
Charles Gibson: Senator Obama, you both have now just taken this pledge on people under $250,000 and 200-and-what, 250,000?
Obama: Well, it depends on how you calculate it. But it would be between 200 and 250,000.
So, assuming that a President Obama or a President Clinton would adhere to these promises, how many people would actually see their taxes go up?
We put the question to the Tax Policy Center, which has a computer model of the tax system similar to the ones used by the Treasury Department and Congress’ Joint Committee on Taxation.
For simplicity, we’ll just focus on the over-$250,000 group. Those reporting adjusted gross income of more than $250,000 to the IRS are projected to make up 2 percent of households next year, when the new president will take office. Those folks will earn 24.1 percent of all income, and pay 43.6 percent of all personal federal income taxes, the Tax Policy Center figures. Under either Obama or Clinton, they might pay even more.
The candidates haven’t said exactly how a $250,000 limit would be applied. But often these figures are meant only for couples filing jointly, and the limit is half that for singles filing alone.
Joint returns with more than $250,000 adjusted gross income and single returns with more than $125,000 adjusted gross income together are estimated to make up 3.1 percent of households next year. That group is projected to earn 27 percent of all personal income and pay 47.9 percent of all personal federal income taxes in 2009, according to the TPC’s calculations.
If the ceiling is set at $200,000 for couples and $100,000 for singles, all those percentages would rise, of course.