Tax Revenues from Richest Fell
September 29, 2003
The incomes of the top 1 percent of Americans fell 18 percent in 2001, as did their income taxes, shaving $66 billion off revenues and showing how dependent the federal government has become on its wealthiest citizens.
- Over all, Americans had 2.8 percent less income in 2001 than in the previous year.
- But federal tax revenues fell 9.4 percent because the incomes of those at the top, who pay the highest tax rates, dropped so much more than the average.
- The top 1 percent reported $1.09 trillion of income, down from $1.34 trillion in 2000, according to Internal Revenue Service data.
The minimum income to reach the top 1 percent was $293,000 last year, down from $313,500 in 2000, but almost identical to the threshold in 1999.
The sharp decline in incomes at the top "is obviously due to the collapse of the stock market boom and the recession," said Bruce Bartlett, a senior fellow at the National Center for Policy Analysis. Bartlett, an advocate of lower taxes, noted that the Bush tax cuts in 2001 did not cause the drop in taxes by the wealthy. "It is pretty clear that the tax cut played no role by the fact that the average tax rate paid by the top 1 percent actually went up slightly," he said.
Taxes paid by the top group fell to $300.1 billion in 2001 from $366.9 billion in 2000.
The top group paid 33.9 percent of all income taxes, down from 37.4 percent in 2000.
Source: David Cay Johnston, "Top 1% in '01 Lost Income, but Also Paid Lower Taxes," New York Times, September 27, 2003.
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