Recently, and for the first time, the IRS published state-level data on tax returns with adjusted gross incomes over $1 million for tax year 2010. Together with data on incomes over $200,000, we can finally take a look at who might win and who might lose as a result of President Obama’s tax proposal.
Here is what people need to realize. Returns with adjusted gross income over $1 million a year were only 0.19% of total tax returns, but 22% of total taxes paid. Those making over $200,000 were 3% of returns, but nearly 50% of income tax paid.
The Tax Foundation just published a map that shows the percentage of federal income tax revenue from each state that is paid by filers with incomes over $200,000. Such filers make up a small percent of the population but pay a high percent of total tax revenue. Given that President Obama proposes to let the Bush tax cuts expire for single filers earning over this threshold (and for married filers earning over $250,000) this map gives an idea of the states that would be most affected.
