Top Earners Change from Year to Year
November 26, 2014
Are America's highest earners the same, static group of ultra-wealthy individuals, sitting atop the income distribution from year to year? Not at all. As Mark J. Perry of the American Enterprise Institute explains, the wealthiest Americans are an ever-changing group, and Americans move up and down the income ladder throughout their lives.
The IRS recently issued new data regarding how often American taxpayers appeared in the list of top 400 earners, analyzing tax returns across the 19-year period from 1992 to 2010. What they found differs markedly from most commentary on income mobility. There were 4,024 unique taxpayers whose tax returns filed from 1992 to 2010 placed in the top 400 earners. Of those:
- The vast majority -- 72.3 percent -- of the 4,024 taxpayers were in the top 400 only once during the period.
- Just 27.7 percent of the top 400 taxpayers made the list more than once during the period.
- Eighty-five percent of top earners (3,413 of the 4,024 taxpayers) made it into the group only once or twice.
- Just 95 taxpayers (2.4 percent of the total) sat in the top 400 for at least a decade.
Perry says the data contradicts the widely-held belief that America's top income earners are a set group that doesn't move down the income ladder.
Source: Mark J. Perry, "IRS data show that the vast majority of taxpayers in the 'Fortunate 400' are only there for one year," American Enterprise Institute, November 25, 2014.
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