When you hear about taxes you usually hear the marginal tax rates discussed most. People talk about being in the 25% tax bracket or maybe discuss a new law proposing an increase in the top tax bracket. The marginal tax rate is what you pay in taxes on each additional dollar earned. A better picture of your actual tax obligations is your effective tax rate. Today I'll show what the effective tax rates are for different income levels.
I got the numbers from the IRS statistics site. The latest figures there were for 2008.
There were 142M total tax filers in 2008. The total effective tax rate for all payers was 13.9%.
87% of tax filers had AGI of under $100,000 and paid an effective tax rate below 10%.
Here is at table showing the number of tax filers in each income group and their respective effective tax rates:
| # filers | % of AGI | |
| No adjusted gross income | 2,489,989 | 0.0% |
| $1 under $5,000 | 11,638,707 | 5.0% |
| $5,000 under $10,000 | 12,139,638 | 2.6% |
| $10,000 under $15,000 | 11,702,056 | 2.9% |
| $15,000 under $20,000 | 11,076,002 | 3.8% |
| $20,000 under $25,000 | 9,866,247 | 5.2% |
| $25,000 under $30,000 | 8,743,581 | 6.2% |
| $30,000 under $40,000 | 14,554,280 | 6.8% |
| $40,000 under $50,000 | 11,087,123 | 7.5% |
| $50,000 under $75,000 | 19,196,461 | 8.5% |
| $75,000 under $100,000 | 11,729,485 | 9.3% |
| $100,000 under $200,000 | 13,851,341 | 12.7% |
| $200,000 under $500,000 | 3,476,747 | 19.6% |
| $500,000 under $1,000,000 | 577,618 | 24.1% |
| $1,000,000 under $1,500,000 | 140,635 | 24.8% |
| $1,500,000 under $2,000,000 | 59,460 | 25.0% |
| $2,000,000 under $5,000,000 | 86,329 | 24.8% |
| $5,000,000 under $10,000,000 | 21,390 | 24.0% |
| $10,000,000 or more | 13,480 | 21.1% |
Here is the data shown graphically :
For the picture I chopped off the data at the $1M income level just to make the picture cleaner.
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