They say the “top 1%” runs America, so why not just join them?
According to the IRS’ just released Statistics of Income Bulletin (Winter 2018 edition) the price of admission to the table that runs the country, is just under half a million: $480,930 in Adjusted Gross Income to be precise, and 1.4 million Americans belonged to this elite club in 2015, the most recent available year. Incidentally, in 2009 just after the financial crash, $351,968 would have sufficed to join the “1%.”
But what if merely the 1% is too pedestrian? What if 0.1%, or 0.01% or even 0.001% is more your style? Or maybe you swing the other way, and choose to mingle with the “top 50%”?
Well, to join the most financially exclusive group tracked by the IRS, the so called “Top 0.001 percent” you need to earn no less than $59,380,503, something which only 1,412 American taxpayers achieved…
These numbers have been rising over the past decade, although predictably they dipped in 2009 when the US financial system was on the verge of collapse.
Here is the full breakdown of respective “percentage” cutoffs by AGI, together with how many Americans earned that income in 2015:
- Top 50 percent: $39,275 and 70.602 million
- Top 4 percent: $218,911 and 5.647 million
- Top 3 percent: $253,979 and 4.236 million
- Top 2 percent: $316,913 and 2.824 million
- Top 1 percent: $480,390 and 1.412 million
- Top 0.1 percent: $2,220,264 and 141,205
- Top 0.01 percent: $11,930,649 and 14,120
- Top 0.001 percent: $59,380,503 and 1,412
Some other interesting observations from the latest IRS bulletin:
In 2015, the adjusted gross income threshold for the top 50% of all individual income tax returns was $39,275. These taxpayers accounted for 88.7 percent of total AGI and paid 97.2 percent of total income tax.
Demonstrating the uneven distribution of tax payment, consider next that the top 1% of tax returns accounted for 20.7% of total AGI and paid 39.0% of total income tax.
Narrowing this down further, top 0.01 percent of tax returns had an AGI of $11,930,649 or more, accounted for 4.9% of total AGI in the US and paid 8.7% of total income tax, while the pinnacle of wealth – those 0.001 percent of Americans who earned more than $59,380,503 – accounted for 2.1% of total AGI and paid 3.5% of total income tax.
In other words, 1,412 Americans – granted the absolute richest – paid 3.5% of America’s total tax bill.
Some other observations from Bloomberg’s Joe Mysak, who notes that it’s a pretty safe bet that all those in the ultra wealthy strata held at least some tax-free muni bonds.
In 2015, Americans received $57 billion of tax-fee interest, according to the IRS. Just about half of that interest went to 1.2 million filers who earned $250,000 and more.
What’s disturbing about the data is that the number of investors claiming tax-exempt interest — the municipal market’s constituency, if you will, is falling, after reaching a peak of almost 6.5 million in 2008. With corners of Congress perennially threatening to chip away at bondholders’ tax break, munis are asset class in need of a champion. Maybe it’ll be one of those one percenters.
The answer to this is simple: with the stock market has generated far greater artificial returns than muni bonds for years, even when net of taxes, why “risk” putting your money in the safest of investments?
Finally, for those who have just one question: how to enter the elite ranks of the top 0.001%, or even 1%, remember the Fed made it so very easy for you: just Buy The Fucking Dip every single time, and pray to the Fed that the centrally-planned monster they have created – and bizarrely still call the “market” – survives one more day.