Earnings at Peak of U.S. Income Distribution Jumped 20% in 2014


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By Richard Rubin

The total income reported on the top 400 individual tax returns rose 20% in 2014, according to Internal Revenue Service data released Thursday.

The figures reveal the concentration of earnings at the pinnacle of the income distribution, in a club that required $126.8 million of adjusted gross income to enter. That group, out of nearly 150 million tax returns in 2014, received 1.3% of income and 10% of capital gains that get preferential rates. The same 400 households also made 6.9% of all charitable contributions.

The increases in incomes for the top 400 in 2014 may be somewhat skewed by the tax increases that took effect in 2013. Those changes encouraged taxpayers to realize capital gains in 2012 instead of 2013, causing a spike in reported income in 2012 and a dip in 2013.

The top 400 are measured by income, not wealth, and the individuals change from year to year. Many wealthy people can avoid annual income taxes by not selling assets and wouldn't be part of the list, which doesn't include taxpayers' names.

The IRS also said on Thursday that it would no longer release data on the top 400, which it compiled going back to 1992. Instead, future reports will focus on the top 0.001%, which included 1,396 households for 2014.

Write to Richard Rubin at richard.rubin@wsj.com


  (END) Dow Jones Newswires
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This article appears in: US Markets


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