Ninety years of individual income and tax statistics, 1916-2005

Ninety years of individual income and tax statistics, 1916-2005

Scott Hollenbeck

Since 1916, the Internal Revenue Service (IRS) has been publishing income and tax statistics based on information reported on Federal tax returns filed by U.S. individual taxpayers. These publicly available, annual Statistics of Income (SOI) reports were created shortly after enactment of the modern income tax in 1913. Detailed data for Tax Year (TY) 1916 were reported in the first volume of the annual SOI report, along with a few statistics for 1913-1915.

This article focuses on the regular annual SOI individual income tax return program and the data that have been published over the past 90 years. The article includes a brief history of the Statistics of Income program, as well as a summary of the major tax law changes that have affected individual taxpayers. The article also includes some analysis of the changes, over time, in individual return filings, total income, average tax rate, and the alternative minimum tax. Finally, the article presents historical tabulations, which summarize the individual income tax data that have been reported by SOI over the past 90 years.

Background and History

During the beginning years of the SOI program, the individual income tax tabulations that were included in reports were relatively uncomplicated and few in number. The data that could be presented were largely limited by data items that were reported on the simple tax forms and the lack of modern data processing equipment and technology. Until the late 1920s, the individual income statistics particularly emphasized the tax, the amount of income producing the tax, and the location in which the returns were filed. A major portion of each report was dedicated to showing the number of returns, income, and tax, classified by the size of income for each State. The number of returns filed in each county, city, and town were available for the first 21 years.

The number of users of SOI data increased as many Federal, State, and private economic research organizations were created. As the needs of these new users increased, along with those of tax administrators and the estimators of future tax revenue, many new data items were requested. As a result of meeting these requests, the number of basic tables included in the annual SOI report increased, largely with the introduction of crosstabulations. Added data included items such as detailed sources of income, tax payments, number of exemptions, and standard and itemized deductions, including types of itemized deductions. New classifiers were also added to the reports, including the size of specific income sources and net income.

As technology advanced and computer processing was introduced, more sophisticated tables could be produced. These newer, more complex tables were added to the SOI reports, in order to meet customer needs. The reports were improved to show added detail for the number of returns filed, sources of income, marital status, and for taxable and nontaxable returns. There was more information for types of dependents, types of tax computation, and for several types of tax credits. New classifiers included taxpayers age 65 and older, marginal tax rates, and alternative income concepts. More recently, new classifiers have been added to provide greater detail for taxpayers with higher incomes. In earlier reports, taxpayers with an adjusted gross income (AGI) of $1 million or more were all grouped together. The TY 2000 report was expanded by adding several income classes, up to a new top bracket of taxpayers with AGI of $10 million or more. Additionally, the reports were expanded to show data on new adjustments available to taxpayers, such as deductions for Health Savings Accounts (HSA), tuition and fees, and interest paid on student loans. Details on recent tax credits were added to the reports, including the child tax credit, adoption credit, and education credits.

In the future, the SOI reports will continue to expand to meet the needs of data users. Among the users of SOI data are the Treasury Department’s Office of Tax Analysis, the Joint Committee on Taxation of the U.S. Congress, the Bureau of Economic Analysis and the Bureau of the Census (both in the Department of Commerce), private nonprofit research organizations, universities and businesses, as well as many State and local Government agencies. Many SOI statistics are available on the SOI Web site (www.irs.gov/taxstats/) in order to provide data on a more timely basis. Some of the material on the Web site has replaced what was previously published in paper reports.

The Statistics of Income Bulletin was introduced as a quarterly publication on June 26, 1981. The first report (Volume 1, Number 1) was produced in accordance with the mandate of Internal Revenue Code section 6108 that requires the preparation and publication of statistics reasonably available with respect to the operation of the internal revenue laws. The first Bulletin presented preliminary statistics for individual tax returns for 1979 and the first detailed statistics on both sole proprietorships and partnerships for 1978. Each of these three subjects was previously released in a separate report as statistical tables with little underlying analysis. However, the introduction of the Bulletin presented a unique opportunity with which timely analytical tax law statistics would be made available to Federal and State governments, academics, and private researchers. More than 25 years later, the Bulletin has grown in content and statue to include far-ranging subjects related to individual income tax returns. Such subjects include individual income tax rates and shares, sole proprietorship and farm proprietorship returns, high-income tax returns, individual foreign-earned income and foreign tax credit, and accumulation and distribution of individual retirement arrangements.

Changes in the Law

Since 1913, there has been a fairly steady increase in the number of returns filed, an increase in the amount and types of income reported, as well as more individual income taxes being collected by the IRS. In addition to growth in the U.S. population, real growth in the economy, and price inflation, the driving factors behind these increases have included several major changes in the tax law.

In general, the increased demands for additional revenue in order to finance World War l, World War II, and the Korean conflict resulted in rapid and numerous changes in the tax law. There were many important tax law changes shortly after the enactment of the modern income tax in 1913. Some of the notable changes were the elimination of collection of taxes at the source (1916), credit for dependents and deduction for charitable contributions (1917), and adoption of preferential tax rates on long-term capital gains and introduction of the gross income filing requirements (1921). In 1939, the Internal Revenue Code was created, and all revenue laws in effect at that time were consolidated into a single statute.

The most drastic revisions to the tax laws occurred in the early 1940s when the individual income tax was broadened to cover most of the working population. Prior to that period, exemptions were high enough that most taxpayers did not earn enough to fall into even the lowest tax bracket. Starting in the 1960s, there were several tax law changes affecting individuals that, in addition to revenue objectives, reflected a concern with social objectives. A few examples of tax law changes with social objectives are the earned income credit (EIC), education credits, and deductions for health savings accounts. A brief summary of the major tax law changes affecting individual income tax returns beginning in 1943 is provided in Figure A.

Figure A

Major Tax Law Changes Affecting Individuals, 1943-2005

1943–Reenactment of income tax withholding on wages and salaries

(originally enacted in 1913, but repealed in 1916).

1944–Adoption of the standard deduction and per capita personal

exemption of $600.

1948–Introduction of “income splitting” for married couples,

1954–A complete revision of the Internal Revenue Code, including

changes to tax rates, institution of retirement income credit,

credit for dividends, credit for partially tax-exempt interest,

and major modifications to the definition of adjusted gross

income and itemized deductions.

1960–Liberalization of allowable medical and dental expense

deductions for taxpayers’ parents.

1963–Introduction of a deduction for contributions to a self-employed

retirement plan.

1964–Institution of statutory adjustments for employee moving

expenses and employee business expenses, institution of income

averaging tax computation, increase in dividend exclusion, and

introduction of minimum standard deduction.

1965–Tax rates were reduced.

1966–Introduction of a system of graduated rates for taxes withheld

from salaries and wages.

1967–Deduction of part of the premiums paid for medical care

insurance, and application of the exclusion of 1 percent of

adjusted gross income for drug expenses and 3 percent of

adjusted gross income for all medical and dental expenses to

persons age 65 or over formerly exempt from those limitations.

1968–Imposition of a 10-percent income tax surcharge beginning

April 1, 1968, and liberalization of rules governing

self-employed retirement plan deductions.

1969–Establishment of a new minimum tax on individuals. Extension

of the 10-percent income tax surcharge to cover all of Calendar

Year 1969.

1970–Introduction of a new minimum standard deduction or low-income

allowance, increase in the deduction allowed for each exemption,

liberalization of the tax return filing requirements, changes in

tax withholding, introduction of a tax on specified “tax

preferences,” imposition of higher tax rates on capital gains,

and limitations on capital loss deductions.

1971–Introduction of a maximum tax on earned income and an increase

in the exemption amount to $675.

1972–Increase in the exemption amount to $750, introduction of work

incentive (WIN) credit, and Presidential Campaign Fund check-box.

1974–Comprehensive revisions to pension and employee benefit plan

rules, and a tax rebate for 1974.

1975–Increase in standard deduction, establishment of personal

exemption credit, earned income credit, and purchase-of-residence

credit. Establishment of deduction for contributions to

individual retirement accounts.

1976–Change in standard deduction, institution of child care credit,

general tax credit, credit for the elderly, and extension of

earned income credit through 1977.

1977–Establishment of the “zero bracket amount” and new jobs credit

and implementation of disability pay exclusion.

1978–Change in treatment of capital gains, institution of residential

energy and business energy investment credits, and alteration of

treatment of income earned abroad.

1979–Repeal of political contributions deduction, and nonbusiness

State and local gasoline tax deduction. Increase in the amount of

political contributions credit, personal exemption amount, and

the zero-bracket amount. Widening of tax brackets and lowering

of some tax rates. Introduction of a tax on certain unemployment

compensation, expiration of the general tax credit, and

introduction of the advance earned income credit and the

alternative minimum tax.

1981–Reduction in marginal tax rates by 23 percent, phased in over

three years. Increase in the combined (for 1981 only) interest

and dividend exclusion. Introduction of an alternative tax on net

capital gains. Provided new deduction for two- earner married

couples.

1982–Scheduled increases in accelerated depreciation deductions were

repealed, a 10- percent withholding on dividends and interest

paid to individuals was instituted, and the floor for medical

expense deductions was raised from 3 percent to 5 percent of AGI

1983–Portions of social security benefits and railroad retirement

benefits made taxable beginning in 1984.

1984–Reduced long-term capital gain holding period from 1 year to 6

months.

1986–Lowered top marginal tax rate to 28 percent, increase in

standard deduction to $5,000 for married couples, increase of

personal exemption to $2,000, and increased earned income tax

credit. Repealed two-earner deduction, long-term capital gains

exclusion, State and local general sales tax deduction, income

averaging, and exclusion of unemployment benefits. Limited IRA

eligibility, consumer interest deduction, deductibility of passive

losses, medical expenses deduction, deduction for business meals

and entertainment, pension contributions, and miscellaneous

expense deduction.

1990–Increased top marginal tax rate to 31 percent and increased the

AMT rate to 24 percent. Capped the capital gains rate at 28

percent. Limited the value of high-income itemized deductions.

Created a temporary phase-out of personal exemptions for

high-income taxpayers. Expansion of the earned income tax credit

and created a low-income credit for costs of health insurance.

1993–Introduction of new higher tax rates of 36 percent and 39.6

percent. Increased exemption amounts and tax rates under AMT,

Expanded the earned income tax credit to single workers with no

children earning $9,000 or less.

1997–Introduction of a child credit of $500 per child per year.

Introduction of the HOPE and Lifetime Learning nonrefundable

education credits. Reduced capital gains tax rates to 20 percent

and 10 percent. Extended AGI phase for deductible IRAs’ allowed

tax-free withdrawals for first-time home purchases’ created new

Roth and Education IRAs.

2001–Reduction of tax rates and introduction of new 10-percent

rate. Doubled the child tax credit to $1,000 per child and made a

portion of it refundable. Lowered the “marriage penalties” by

making the standard deduction and 15-percent tax bracket twice

the size as for a single taxpayer. Phased-in both the repeal of

the personal exemption phase-out (PEP) and the repeal of the

Pease cutback in itemized deductions, over 5 years.

2003–Accelerated provisions from 2001 tax law change. Tax rate

reductions scheduled for 2006, begin in 2003. Accelerated

increase in standard deduction for joint fliers to 2003, rather

than gradually to 2009. Increased AMT exemptions. Reduction in

adjusted net capital gains rates and beginning of taxation of

dividends at the adjusted net capital gains rates.

2005–Increased exemption amounts for AMT.

Number of Returns

The number of individual tax returns filed for 1913 through 2005 is displayed in Figure B. During the first 4 years of the modern income tax, the number of individual tax returns filed ranged from approximately 330 thousand to 440 thousand. As a result of the previously mentioned tax law changes in 1916 and 1917, the number of returns filed rose to nearly 3.5 million in 1917. Over the following 22 years, the number of returns ranged from approximately 4.1 million to 7.7 million.

The introduction of lower income filing requirements for 1940 caused the number of returns to nearly double to 14.7 million. The number of returns filed surpassed 50 million for the first time in 1946 and increased to a little more than 60 million by 1959. During the 1960s and again in the 1970s, the number increased by an average of approximately 16 million returns to reach almost 94 million in 1980. in 1985, the number of individual fliers increased to more than 100 million. Since that time, the steady growth in the number of returns has mirrored the general population growth of the U.S., reaching a new high of more than 134 million returns in 2005.

Total Income

Statistics of Income reports currently present annual data based on the concept of adjusted gross income (AGI), positive sources of income less negative income and statutory adjustments. AGI has been used as the basis for grouping individual tax data since 1944. Prior to 1944, individual tax statistics were based on the concept of net income, positive sources of income less negative amounts and allowable deductions. (1) The differences in these two concepts make direct comparisons difficult. However, a concept of “total income,” positive sources of income less negative amounts (as provided in the tax law for a particular year), can be constructed for the entire 90-plus-year period of the individual income tax. (2) Table 1 shows total income, as well as major sources of income, and tax items from 1913-2005.

[FIGURE B OMITTED]

Taxpayers reported $3.9 billion in total income for the first year of the income tax in 1913. In the 92 years since 1913, total income has climbed to more than $7.5 trillion for 2005, the most recent year for which SOI has statistics. For most years, total income reported in current dollars has grown. As expected, total income declined for a few years in a row, 1929-1932, due to the Great Depression that began in the United States with the stock market crash of 1929. However, in the 73-year period since 1932, total income has grown in all but 4 years, 1938, 1949, 2001, and 2002. For the 2 most recent years during which total income fell, 2001 and 2002, the decline was mainly due to large declines in net capital gain (less loss).

Table 1A presents total income, major sources of income, and tax items from 1913-2005 in constant dollars. (3) The constant-dollar total income amounts provided in Table 1A show that, in real terms, total income reported on individual income tax returns has grown throughout the majority of the last 90-plus years. Total income in real terms fell in only 19 of the last 90 years, including 4 consecutive years during the Great Depression. In Figure C, total income in current dollars is compared with total income in constant dollars from 1915 to 2005. Generally, Figure C shows that total income during that 90-year period has grown steadily in both real and current dollars. However, when looking at year-to-year changes in total income, constant-dollar total income more clearly depicts the changes in the U.S. economy. For example, the recessions of 1973-1975, 1991, and 2001 are apparent when looking at total income in real terms. (4)

[FIGURE C OMITTED]

[FIGURE D OMITTED]

Average total income from 1945 to 2005 in current versus constant dollars is shown in Figure D. Average income for this article is calculated by dividing total income by the number of returns for a particular year. For the period 1945 to 2005, the lowest average income, in constant dollars, was $23,800 for 1947. One of the main reasons for the decline in average income before 1947 was the increase in the number of returns filed with lower income due to lower income filing requirements introduced for 1940. Prior to that period, only upper income people were taxed. The graph of constant-dollar average income shows that average income generally increased from the late 1940s through the early 1970s. Then, in the period from the mid 1970s to the early 1990s, average income stayed in the low- to mid-$40,000 range before climbing again for 7 straight years from 1994 through 2000. Average income for 2000 reached $56,315, the highest average income during the 1945 to 2005 period.

Sources of Income

The main items that make up total income have largely stayed the same throughout the years. Salaries and wages have been the largest component of total income in every year except the first year of SOl statistics, 1916. In 1916, both dividends and business income were larger than salaries and wages. Even with salaries and wages as the largest component of total income in every year since 1917, salaries and wages as a percentage of total income has varied from a low of 26.7 percent of total income in 1917 to a high of 83.2 percent in 1070. For the majority of the years in the 1950s, 1960s, 1970s, and early 1980s, salaries and wages as a percentage of total income stayed in the low 80-percent range. While salaries and wages are still by far the largest source of total income, in the last 20 years, there has been a downward trend in their percentage of total income. (5) At almost $5.2 trillion for 2005, salaries and wages made up only 68.4 percent of total income (Figure E). Along with the decline in the share of salaries and wages in total income, there has been an upward trend in the share of business income, capital gains, and other income in total income. The percentage of total income that these sources of income represent is still small in comparison to salaries and wages.

[FIGURE F OMITTED]

However, from 1995 to 2005, business income has grown from 3.2 percent of total income to 8.9 percent; capital gains has increased from 2.8 percent to 8.9 percent; and other income has increased from 3.8 percent to 9.4 percent.

Average Tax Rate

The average individual income tax rate is calculated by dividing income tax by the total income for a tax year. For this article, individual income tax before credits is used to calculate the average tax rate. Most of the fluctuations in the average tax rate during the past 90-plus years can be attributed to tax law changes affecting the definition of income reported on a tax return and to how tax before credits was calculated on that income. For nearly the first 30 years of the modern income tax system, the average tax rate fluctuated between less than 1.0 percent and 7.1 percent. During the Great Depression, the average tax rate dropped to just over 2.1 percent for 1931.

Throughout the early 1940s, several tax laws were passed to increase individual income tax rates. These changes in law resulted in average tax rates reaching double digits for the first time in 1942 and rising to more than 14.2 percent by 1945, as illustrated in Figure F. After World War II, tax rates fell to a low of 9.1 percent in 1949. Since 1955, the average tax rate has ranged between approximately 11.6 percent and 16.1 percent. During the 1950s and early 1960s, there were gradual increases in the average tax rate up to 13.3 percent in 1963. The Revenue Act of 1964, which reduced tax rates and introduced a minimum standard deduction, helped lower the average tax rate to 11.6 percent for 1965. A 10-percent income tax surcharge was created in 1968 in order to help pay for the Vietnam War, which resulted in a rise in the average tax rate to a high of almost 14.5 percent in 1969.

During the 1970s, the U.S. economy experienced a period of high inflation, resulting in higher total and average tax burdens for individuals. This increase in the average tax rate continued until reaching an all-time high of 16.1 percent in 1981. The average tax rates steadily declined after the Economic Recovery Tax Act of 1981 was passed. Then, tax rate increases created under the Omnibus Budget Reconciliation Acts of 1990 and 1993, combined with strong U.S. economic growth, resulted in steady average tax rate increases throughout the 1990s, reaching a high of 15.9 percent in 2000. The reduction of tax rates from the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the acceleration of those tax rate reductions under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) is clear in Figure F, as the average rates declined to 12.6 percent for 2003. For 2004 and 2005, these increased slightly to 13.1 percent.

[FIGURE G OMITTED]

Alternative Minimum Tax

The alternative minimum tax (AMT), also known as the minimum tax for tax preferences in its early years, was first introduced in 1970 and was created to ensure that high-income Americans were not using combinations of tax preferences to completely eliminate their tax liability. Essentially, the alternative minimum tax is a parallel tax that computes its own income amount and is taxed at a different rate than the regular income tax. The AMT did not grow very much for the first few years, but, as shown in Figure G, increased as a result of the Tax Reform Act of 1976, which expanded the definition of tax preferences, reduced deductions from tax preferences, and raised the tax rate on the tax preferences. Over the next 10 years, the alternative minimum tax grew nearly seven-fold to reach just over $6.7 billion before falling to $1.7 billion in 1987 as a result of changes in the Tax Reform Act of 1986. More recently, there has been a general upward trend in the growth of the alternative minimum tax. However, the alternative minimum tax declined for 2001, partially as a result of an increase in the AMT exemption amount. But, since 2001, the AMT has grown from $6.7 billion to slightly more than $17.4 billion for 2005, an increase of nearly 158 percent in just 4 years.

Acknowledgments

The authors wish to express their appreciation to David Paris and Cecelia Hilgert, whose prior article, “70th Year of Individual Income and Tax Statistics, 1913-1982,” Statistics of Income Bulletin, Winter 1983-1984, Volume 3, Number 3, provided source material and inspiration for this article.

Data Sources and Limitations

Throughout the 90-plus years that SOI has been producing individual tax return data, the data have mostly been based on stratified probability samples of unaudited individual income tax returns. A general description of sampling procedures and data limitations applicable to SOI tabulations is contained in the Appendix of this publication. In addition, see the applicable SOI report for more information on data sources and limitations for a specific year. (1) In general, allowable deductions included, but were not limited to, items such as interest paid, taxes paid, charitable contributions, losses from fires and storms, and bad debts. See appropriate SOI reports for those deductions allowable in a specific year.

(2) For each tax year. the total income figure was derived by adding the positive amounts of income less the net loss amounts of income for data shown in the applicable SOI report.

(3) U.S. Department of Labor. Bureau of Labor Statistics. Monthly Labor Review. The Consumer Price Index (CPI-U) for each calendar year represents an annual average of monthly indices (2005-100)

(4) Business Cycle Expansions and Contractions (see http://www.nber.org/cycles/).

(5) Note that, prior to the Tax Reform Act of 1986. because of a 60-percent deduction, taxpayers only had to report 40 percent of their long-term capital gains in excess of short-term losses.

Scott Hollenbeck and Maureen Keenan Kahr are economists with the Individual Research Section. This article was prepared under the direction of Michael Strudler, Chief.

Table 1. All Individual Income Tax Returns:

Sources of Income and Tax Items, Tax Years 1913-2005

(All figures are estimates based on samples–number of returns

are in thousands, money amounts are in millions of current dollars)

Number of Total

Tax year returns income

(1) (2)

1913 358 3,900

1914 358 4,000

1915 337 4,600

1916 437 6,299

1917 3,473 13,652

1918 4,425 15,925

1919 5,333 19,859

1920 7,260 23,736

1921 6,662 19,577

1922 6,787 21,761

1923 7,698 25,313

1924 7,370 26,189

1925 4,171 22,337

1926 4,138 22,442

1927 4,102 23,854

1928 4,144 27,338

1929 4,133 26,692

1930 3,852 17,047

1931 3,411 12,221

1932 4,083 10,671

1933 3,892 11,473

1934 4,198 14,957

1935 4,670 17,193

1936 5,486 21,773

1937 6,350 24,120

1938 6,251 21,436

1939 7,652 25,363

1940 14,711 40,155

1941 25,870 63,433

1942 36,619 85,780

1943 43,722 106,555

1944 47,111 116,465

1945 49,932 120,009

1946 52,817 134,083

1947 55,099 149,736

1948 52,072 163,516

1949 51,814 160,574

1950 53,060 179,148

1951 55,447 202,337

1952 56,529 215,290

1953 57,838 228,708

1954 56,747 229,573

1955 58,250 248,974

1956 59,197 268,268

1957 59,825 280,895

1958 59,085 281,777

1959 60,271 305,772

1960 61,028 316,141

1961 61,499 330,617

1962 62,712 349,484

1963 63,943 369,675

1964 65,376 399,539

1965 67,596 432,344

1966 70,160 472,132

1967 71,651 509,151

1968 73,729 559,760

1969 75,834 603,546

1970 74,280 639,358

1971 74,576 682,467

1972 77,573 755,540

1973 80,693 837,813

1974 83,340 918,626

1975 82,229 962,887

1976 84,670 1,070,180

1977 86,635 1,177,821

1978 89,772 1,324,811

1979 92,694 1,490,173

1980 93,902 1,642,346

1981 95,396 1,804,046

1982 95,337 1,917,023

1983 96,321 2,023,983

1984 99,439 2,229,649

1985 101,660 2,401,034

1986 103,045 2,580,689

1987 106,996 2,803,941

1988 109,708 3,111,222

1989 112,136 3,280,931

1990 113,717 3,439,402

1991 114,730 3,499,250

1992 113,605 3,664,594

1993 114,602 3,759,964

1994 115,943 3,946,621

1995 118,218 4,230,493

1996 120,351 4,578,621

1997 122,422 5,016,905

1998 124,771 5,467,504

1999 127,075 5,912,167

2000 129,374 6,423,986

2001 130,255 6,231,177

2002 130,076 6,110,747

2003 130,424 6,294,684

2004 132,226 6,886,852

2005 134,373 7,531,892

Major sources of income

Salaries

Tax year and wages Interest Dividends

(3) (4) (5)

1913 n.a. n.a. n.a.

1914 n.a. n.a. n.a.

1915 n.a. n.a. n.a.

1916 1,851 667 2,136

1917 3,648 936 2,849

1918 8,267 1,403 2,469

1919 10,756 1,500 2,454

1920 15,323 1,709 2,736

1921 13,813 1,690 2,477

1922 13,694 1,738 2,664

1923 14,193 2,183 3,120

1924 13,618 2,281 3,251

1925 9,742 1,814 3,465

1926 9,994 1,936 4,012

1927 10,218 2,026 4,255

1928 10,945 2,143 4,440

1929 11,373 2,210 5,081

1930 10,206 1,940 4,632

1931 8,631 1,337 3,600

1932 8,356 1,307 2,189

1933 7,565 1,106 1,711

1934 8,681 995 2,041

1935 9,972 98 2,288

1936 11,718 955 3,228

1937 14,206 856 3,248

1938 13,307 823 2,212

1939 16,491 832 2,544

1940 27,707 1,003 2,999

1941 47,140 1,029 3,299

1942 65,617 982 2,833

1943 82,755 886 2,780

1944 91,125 [2] n.a. [2] 3,924

1945 91,700 [2] n.a. [2] 3,925

1946 99,174 1,067 3,674

1947 114,804 1,125 4,295

1948 125,881 1,293 4,971

1949 124,883 1,528 5,246

1950 139,073 1,595 6,157

1951 160,482 1,702 6,056

1952 174,339 1,847 5,860

1953 187,734 2,043 5,828

1954 185,953 2,370 7,048

1955 200,712 2,584 7,851

1956 215,618 2,872 8,606

1957 228,077 3,319 9,124

1958 227,551 3,659 9,741

1959 247,370 4,395 9,356

1960 257,918 5,057 9,530

1961 266,902 5,683 9,890

1962 283,373 7,155 10,640

1963 299,443 9,212 11,452

1964 323,266 10,125 11,917

1965 347,150 11,296 12,961

1966 381,067 13,225 13,998

1967 411,646 14,899 14,202

1968 451,505 16,782 15,222

1969 498,865 19,626 15,740

1970 531,884 22,021 15,807

1971 564,967 24,731 15,671

1972 622,599 27,400 16,794

1973 687,179 32,174 18,734

1974 758,628 39,543 20,887

1975 795,399 43,434 21,892

1976 880,998 48,588 24,461

1977 969,403 54,603 27,020

1978 1,090,292 61,223 30,206

1979 1,229,251 73,875 33,483

1980 1,349,843 102,009 38,761

1981 1,486,100 140,559 48,161

1982 1,564,995 157,021 54,045

1983 1,644,573 153,805 48,557

1984 1,807,138 176,369 48,641

1985 1,928,201 182,109 55,046

1986 2,031,026 167,640 61,623

1987 2,163,906 168,966 66,791

1988 2,337,984 186,982 77,330

1989 2,449,531 220,016 81,309

1990 2,599,401 227,084 80,169

1991 2,674,261 209,411 77,284

1992 2,805,703 162,343 77,926

1993 2,892,120 131,141 79,729

1994 3,026,778 126,169 82,410

1995 3,201,457 154,781 94,592

1996 3,376,872 165,673 104,255

1997 3,613,918 171,700 120,493

1998 3,879,762 178,334 118,480

1999 4,132,473 175,675 132,466

2000 4,456,167 199,322 146,988

2001 4,565,229 198,178 119,533

2002 4,559,691 149,025 103,241

2003 4,649,900 127,160 115,141

2004 4,921,806 125,474 146,839

2005 5,155,407 162,433 166,482

Major sources of income

Business

net income Net capital

less gain less All other

Tax year loss [1] loss income

(6) (7) (8)

1913 n.a. n.a. n.a.

1914 n.a. n a. n.a.

1915 n.a. n.a. n.a.

1916 2,637 N/A -992

1917 3,640 N/A 2,579

1918 4,339 N/A -553

1919 5,709 N/A -560

1920 4,922 N/A -954

1921 3,707 462 -2,572

1922 4,267 742 -1,344

1923 6,399 866 -1,448

1924 6,565 1,124 -650

1925 5,516 940 860

1926 5,306 1,287 -93

1927 5,043 1,585 727

1928 5,223 1,708 2,879

1929 5,282 1,341 1,405

1930 3,101 676 -3,508

1931 2,016 990 -4,353

1932 1,229 325 -2,735

1933 1,746 232 -887

1934 2,125 18 1,097

1935 2,387 363 2,085

1936 3,210 852 1,810

1937 3,359 158 2,293

1938 3,120 -176 2,150

1939 3,674 321 1,501

1940 5,407 332 2,707

1941 8,455 430 3,080

1942 12,833 112 3,403

1943 15,717 595 3,822

1944 17,250 917 3,249

1945 19,003 2,114 3,267

1946 23,267 3,068 3,833

1947 23,295 2,154 4,063

1948 24,506 2,201 4,664

1949 21,705 1,604 5,608

1950 23,429 2,927 5,967

1951 24,878 2,997 6,222

1952 24,754 2,470 6,020

1953 24,951 2,075 6,077

1954 25,452 3,352 5,398

1955 27,454 4,751 5,622

1956 30,137 4,553 6,482

1957 29,698 3,485 7,192

1958 29,906 4,330 6,590

1959 30,994 6,275 7,382

1960 30,038 5,300 8,298

1961 31,578 7,621 8,943

1962 33,269 5,771 9,276

1963 33,184 6,449 9,935

1964 35,358 7,939 10,934

1965 38,559 10,180 12,198

1966 40,984 9,941 12,917

1967 42,280 13,682 12,442

1968 45,503 17,990 12,758

1969 45,842 14,853 8,620

1970 44,242 9,007 16,397

1971 45,029 13,155 18,914

1972 49,616 17,076 22,055

1973 56,489 16,672 26,565

1974 55,055 13,470 31,043

1975 53,736 14,072 34,354

1976 59,637 18,562 37,934

1977 63,271 20,777 42,747

1978 75,156 23,231 44,703

1979 69,013 28,448 56,103

1980 64,558 29,660 57,515

1981 52,934 30,819 45,473

1982 48,815 34,404 57,743

1983 59,832 49,408 67,808

1984 68,498 54,519 74,484

1985 76,246 68,278 91,154

1986 84,564 132,842 102,994

1987 129,775 137,399 137,104

1988 183,403 152,841 172,682

1989 195,830 145,631 188,614

1990 208,452 113,159 211,137

1991 205,054 102,776 230,464

1992 241,654 118,230 258,738

1993 248,573 144,172 264,229

1994 280,589 142,288 288,387

1995 295,096 170,415 314,152

1996 323,684 251,817 356,320

1997 355,064 356,083 399,647

1998 389,755 446,084 455,089

1999 419,486 542,758 509,309

2000 426,779 630,542 564,188

2001 441,883 326,527 579,827

2002 458,751 238,789 601,250

2003 483,712 294,354 624,417

2004 563,210 473,662 655,861

2005 672,028 668,015 707,527

Income tax

before Total tax Alternative

Tax year credits liability minimum tax

(9) (10) (11)

1913 28 28 N/A

1914 41 41 N/A

1915 68 68 N/A

1916 173 173 N/A

1917 795 795 N/A

1918 1,128 1,128 N/A

1919 1,270 1,270 N/A

1920 1,075 1,075 N/A

1921 719 719 N/A

1922 861 861 N/A

1923 662 662 N/A

1924 735 704 N/A

1925 759 735 N/A

1926 757 732 N/A

1927 856 830 N/A

1928 1,199 1,164 N/A

1929 1,024 1,002 N/A

1930 502 477 N/A

1931 264 246 N/A

1932 330 330 N/A

1933 374 374 N/A

1934 511 511 N/A

1935 657 657 N/A

1936 1,214 1,214 N/A

1937 1,142 1,142 N/A

1938 766 766 N/A

1939 929 929 N/A

1940 1,496 1,496 N/A

1941 3,908 3,908 N/A

1942 8,927 8,927 N/A

1943 14,590 14,590 N/A

1944 16,224 16,216 N/A

1945 17,061 17,050 N/A

1946 16,091 16,076 N/A

1947 18,092 18,076 N/A

1948 15,442 15,442 N/A

1949 14,538 14,538 N/A

1950 18,375 18,375 N/A

1951 24,439 24,439 N/A

1952 27,822 28,020 N/A

1953 29,450 29,657 N/A

1954 26,873 26,967 N/A

1955 29,982 30,077 N/A

1956 33,134 33,265 N/A

1957 34,816 34,975 N/A

1958 34,755 34,925 N/A

1959 39,092 39,347 N/A

1960 39,909 40,298 N/A

1961 42,714 43,066 N/A

1962 45,691 45,790 N/A

1963 49,117 49,216 N/A

1964 47,896 48,185 N/A

1965 50,144 50,632 N/A

1966 56,773 51,627 N/A

1967 63,655 64,525 N/A

1968 77,440 78,419 N/A

1969 87,336 88,524 N/A

1970 84,156 85,767 122

1971 85,942 87,469 169

1972 94,442 95,949 216

1973 109,394 111,175 182

1974 125,079 127,003 143

1975 127,432 127,939 144

1976 144,186 145,749 1,000

1977 162,587 164,024 1,323

1978 193,555 193,185 1,514

1979 220,099 220,100 1,175

1980 256,294 256,251 1,263

1981 290,207 291,127 1,827

1982 283,932 284,708 1,069

1983 279,842 282,318 2,521

1984 306,686 312,534 4,490

1985 332,165 338,765 3,792

1986 367,592 381,224 6,713

1987 373,857 384,538 1,675

1988 418,889 430,733 1,028

1989 438,240 451,873 831

1990 453,128 468,631 830

1991 454,503 471,083 1,213

1992 482,631 500,020 1,357

1993 508,894 526,819 2,053

1994 541,571 561,042 2,212

1995 596,169 615,806 2,291

1996 666,724 687,332 2,813

1997 739,482 762,258 4,005

1998 813,569 821,899 5,015

1999 906,812 912,464 6,478

2000 1,018,219 1,017,471 9,601

2001 933,567 925,435 6,757

2002 836,843 834,915 6,854

2003 790,006 787,584 9,470

2004 884,343 874,010 13,029

2005 990,152 980,259 17,421

n.a.–Not available.

N/A–Not applicable.

[1] Business net income less loss is sole proprietorship (Schedule C)

plus partnership and S corporation income less loss (Schedule E).

[2] For 1944 and 1945 the total amounts for interest and dividend

income were combined in the 801 reports and shown as dividend income.

NOTES: Detail may not add to totals because of rounding. Data from

1913-1981 are taken directly from Paris, David and Cecelia Hilgert,

“70th Year of Individual Income and Tax Statistics, 1913-1982,”

Statistics of Income Bulletin. Winter 1983-1984, Volume 3, Number 3.

Data for 1982-2005 are from Statistics of Income-Individual Income

Tax Returns (IRS Publication 1304), various years.

Table 1a. All Individual Income Tax Returns: Sources of Income

and Tax Items, Tax Years 1913-2005, in 2005 Constant Dollars [1]

(All figures are estimates based on samples–number of returns

are in thousands, money amounts are in millions of constant dollars)

Number of

Tax year returns Total income

(1) (2)

1913 358 76,936

1914 358 78,120

1915 337 88,949

1916 437 112,862

1917 3,473 208,300

1918 4,425 205,970

1919 5,333 224,189

1920 7,260 231,782

1921 6,662 213,597

1922 6,787 252,972

1923 7,698 289,101

1924 7,370 299,106

1925 4,171 249,281

1926 4,138 247,623

1927 4,102 267,741

1928 4,144 312,229

1929 4,133 304,851

1930 3,852 199,358

1931 3,411 157,024

1932 4,083 152,120

1933 3,892 172,360

1934 4,198 217,993

1935 4,670 245,094

1936 5,486 305,918

1937 6,350 327,128

1938 6,251 296,911

1939 7,652 356,359

1940 14,711 560,162

1941 25,870 842,753

1942 36,619 1,027,781

1943 43,722 1,202,901

1944 47,111 1,292,364

1945 49,932 1,302,098

1946 52,817 1,342,893

1947 55,099 1,311,365

1948 52,072 1,325,090

1949 51,814 1,317,651

1950 53,060 1,451,768

1951 55,447 1,519,862

1952 56,529 1,586,647

1953 57,838 1,672,909

1954 56,747 1,666,751

1955 58,250 1,814,352

1956 59,197 1,926,204

1957 59,825 1,952,270

1958 59,085 1,904,189

1959 60,271 2,052,140

1960 61,028 2,085,890

1961 61,499 2,159,515

1962 62,712 2,260,074

1963 63,943 2,359,396

1964 65,376 2,517,096

1965 67,596 2,680,533

1966 70,160 2,845,907

1967 71,651 2,977,161

1968 73,729 3,141,412

1969 75,834 3,211,786

1970 74,280 3,218,212

1971 74,576 3,291,008

1972 77,573 3,530,071

1973 80,693 3,685,245

1974 83,340 3,639,101

1975 82,229 3,495,387

1976 84,670 3,673,219

1977 86,635 3,795,849

1978 89,772 3,968,337

1979 92,694 4,008,689

1980 93,902 3,892,599

1981 95,396 3,876,020

1982 95,337 3,879,737

1983 96,321 3,968,714

1984 99,439 4,191,053

1985 101,660 4,358,011

1986 103,045 4,598,618

1987 106,996 4,820,508

1988 109,708 5,136,278

1989 112,136 5,167,466

1990 113,717 5,139,367

1991 114,730 5,017,647

1992 113,605 5,101,178

1993 114,602 5,081,806

1994 115,943 5,200,911

1995 118,218 5,421,360

1996 120,351 5,699,201

1997 122,422 6,104,683

1998 124,771 6,550,942

1999 127,075 6,930,650

2000 129,374 7,285,740

2001 130,255 6,871,535

2002 130,076 6,633,846

2003 130,424 6,681,260

2004 132,226 7,120,181

2005 134,373 7,531,892

Major sources of income

Salaries and

Tax year wages Interest Dividends

(3) (4) (5)

1913 n.a. n.a. n.a.

1914 n.a. n.a. n.a.

1915 n.a. n.a. n.a.

1916 33,165 11,951 38,272

1917 55,661 14,281 43,470

1918 106,924 18,146 31,933

1919 121,425 16,934 27,703

1920 149,629 16,688 26,717

1921 150,708 18,439 27,026

1922 159,193 20,204 30,969

1923 162,099 24,932 35,634

1924 155,532 26,051 37,130

1925 108,721 20,244 38,669

1926 110,273 21,362 44,268

1927 114,688 22,740 47,759

1928 125,003 24,475 50,709

1929 129,892 25,241 58,030

1930 119,355 22,688 54,169

1931 110,897 17,179 46,255

1932 119,119 18,632 31,205

1933 113,650 16,616 25,704

1934 126,522 14,502 29,747

1935 142,156 1,397 32,617

1936 164,642 13,418 45,355

1937 192,669 11,610 44,051

1938 184,316 11,399 30,639

1939 231,704 11,690 35,744

1940 386,513 13,992 41,836

1941 626,289 13,671 43,830

1942 786,196 11,766 33,944

1943 934,223 10,002 31,383

1944 1,011,177 [3] n.a. [3] 43,543

1945 994,945 [3] n.a. [3] 42,586

1946 993,266 10,686 36,797

1947 1,005,436 9,853 37,615

1948 1,020,106 10,478 40,284

1949 1,024,775 12,539 43,048

1950 1,127,011 12,925 49,895

1951 1,205,467 12,785 45,490

1952 1,284,846 13,612 43,187

1953 1,373,200 14,944 42,630

1954 1,350,060 17,207 51,170

1955 1,462,651 18,830 57,213

1956 1,548,169 20,621 61,792

1957 1,585,176 23,068 63,413

1958 1,537,741 24,727 65,828

1959 1,660,184 29,496 62,791

1960 1,701,736 33,366 62,879

1961 1,743,343 37,120 64,599

1962 1,832,541 46,271 68,808

1963 1,911,151 58,794 73,091

1964 2,036,576 63,788 75,077

1965 2,152,330 70,035 80,358

1966 2,296,987 79,717 84,377

1967 2,407,020 87,119 83,043

1968 2,533,877 94,182 85,427

1969 2,654,723 104,440 83,761

1970 2,677,241 110,843 79,565

1971 2,724,396 119,258 75,569

1972 2,908,937 128,020 78,466

1973 3,022,659 141,522 82,404

1974 3,005,275 156,648 82,743

1975 2,887,387 157,670 79,470

1976 3,023,882 166,770 83,958

1977 3,124,165 175,973 87,079

1978 3,265,859 183,387 90,479

1979 3,306,787 198,730 90,072

1980 3,199,324 241,776 91,869

1981 3,192,908 301,993 103,475

1982 3,167,290 317,784 109,378

1983 3,224,750 301,588 95,213

1984 3,396,863 331,519 91,430

1985 3,499,792 330,538 99,912

1986 3,619,155 298,723 109,808

1987 3,720,166 290,485 114,826

1988 3,859,749 308,686 127,663

1989 3,858,011 346,525 128,062

1990 3,884,185 339,323 119,793

1991 3,834,678 300,279 110,819

1992 3,905,587 225,984 108,474

1993 3,908,865 177,245 107,758

1994 3,988,730 166,267 108,601

1995 4,102,655 198,351 121,219

1996 4,203,334 206,220 129,771

1997 4,397,496 208,928 146,619

1998 4,648,574 213,673 141,958

1999 4,844,370 205,938 155,286

2000 5,053,946 226,060 166,706

2001 5,034,383 218,544 131,817

2002 4,950,015 161,782 112,079

2003 4,935,465 134,969 122,212

2004 5,088,559 129,725 151,814

2005 5,155,407 162,433 166,482

Major sources of income

Business net Net capital

income less gain less All other

Tax year loss [2] loss income

(6) (7) (8)

1913 n.a. n.a. n.a.

1914 n.a. n.a. n.a.

1915 n.a. n.a. n.a.

1916 47,248 N/A -17,774

1917 55,538 N/A 39,350

1918 56,120 N/A -7,152

1919 64,449 N/A -6,322

1920 48,063 NIA -9,316

1921 40,446 5,041 -28,062

1922 49,604 8,626 -15,624

1923 73,083 9,891 -16,538

1924 74,979 12,837 -7,424

1925 61,559 10,490 9,598

1926 58,546 14,201 -1,026

1927 56,603 17,790 8,160

1928 59,652 19,507 32,881

1929 60,326 15,316 16,047

1930 36,265 7,906 -41,025

1931 25,903 12,720 -5,593

1932 17,520 4,633 -38,989

1933 26,230 3,485 -13,325

1934 30,971 262 15,988

1935 34,028 5,175 29,723

1936 45,102 11,971 25,431

1937 45,556 2,143 31,099

1938 43,215 -2,438 29,780

1939 51,621 4,510 21,090

1940 75,428 4,631 37,763

1941 112,331 5,713 40,920

1942 153,760 1,342 40,773

1943 177,429 6,717 43,147

1944 191,416 10,176 36,053

1945 206,183 22,937 35,447

1946 233,028 30,727 38,389

1947 204,014 18,864 35,583

1948 198,590 17,836 37,796

1949 178,109 13,162 46,019

1950 189,862 23,720 48,355

1951 186,872 22,512 46,737

1952 182,432 18,203 44,366

1953 182,507 15,178 44,451

1954 184,787 24,336 39,191

1955 200,066 34,622 40,969

1956 216,388 32,691 46,542

1957 206,406 24,221 49,986

1958 202,098 29,261 44,534

1959 208,011 42,114 49,543

1960 198,190 34,969 54,750

1961 206,260 49,779 58,414

1962 215,147 37,320 59,987

1963 211,792 41,160 63,409

1964 222,755 50,016 68,884

1965 239,066 63,116 75,628

1966 247,042 59,922 77,861

1967 247,224 80,003 72,752

1968 255,366 100,961 71,599

1969 243,949 79,041 45,872

1970 222,692 45,337 82,534

1971 217,140 63,436 91,208

1972 231,818 79,783 103,046

1973 248,475 73,334 116,850

1974 218,098 53,361 122,976

1975 195,068 51,083 124,709

1976 204,694 63,711 130,202

1977 203,908 66,960 137,764

1978 225,122 69,586 133,903

1979 185,651 76,527 150,922

1980 153,012 70,299 136,319

1981 113,729 66,215 97,699

1982 98,793 69,628 116,862

1983 117,321 96,881 132,961

1984 128,755 102,479 140,007

1985 138,391 123,928 165,450

1986 150,687 236,716 183,529

1987 223,108 236,215 235,708

1988 302,778 252,323 285,079

1989 308,432 229,369 297,067

1990 311,482 169,089 315,494

1991 294,031 147,373 330,467

1992 336,387 164,578 360,168

1993 335,961 194,857 357,121

1994 369,764 187,509 380,040

1995 378,164 218,386 402,585

1996 402,903 313,447 443,526

1997 432,050 433,290 486,299

1998 466,989 534,480 545,269

1999 491,750 636,258 597,047

2000 484,030 715,127 639,872

2001 487,294 360,083 639,414

2002 498,022 259,230 652,719

2003 513,418 312,431 662,764

2004 582,292 489,710 678,082

2005 672,028 668,015 707,527

Income tax

before Total tax

Tax year credits liability

(9) (10)

1913 552 552

1914 801 801

1915 1,315 1,315

1916 3,100 3,100

1917 12,130 12,130

1918 14,589 14,589

1919 14,337 14,337

1920 10,497 10,497

1921 7,845 7,845

1922 10,009 10,009

1923 7,561 7,561

1924 8,394 8,040

1925 8,470 8,203

1926 8,353 8,077

1927 9,608 9,316

1928 13,694 13,294

1929 11,695 11,444

1930 5,871 5,578

1931 3,392 3,161

1932 4,704 4,704

1933 5,619 5,619

1934 7,448 7,448

1935 9,366 9,366

1936 17,057 17,057

1937 15,488 15,488

1938 10,610 10,610

1939 13,053 13,053

1940 20,869 20,869

1941 51,921 51,921

1942 106,960 106,960

1943 164,707 164,707

1944 180,031 179,942

1945 185,112 184,993

1946 161,158 161,007

1947 158,447 158,307

1948 125,138 125,138

1949 119,297 119,297

1950 148,906 148,906

1951 183,574 183,574

1952 205,043 206,502

1953 215,415 216,929

1954 195,104 195,786

1955 218,488 219,181

1956 237,907 238,848

1957 241,977 243,082

1958 234,867 236,016

1959 262,360 264,071

1960 263,319 265,885

1961 278,998 281,297

1962 295,479 296,119

1963 313,482 314,114

1964 301,745 303,566

1965 310,893 313,918

1966 342,215 311,196

1967 372,210 377,297

1968 434,599 440,093

1969 464,761 471,083

1970 423,600 431,709

1971 414,431 421,795

1972 441,257 448,298

1973 481,186 489,020

1974 495,496 503,117

1975 462,592 464,433

1976 494,895 500,260

1977 523,981 528,612

1978 579,774 578,666

1979 592,085 592,087

1980 607,454 607,352

1981 623,514 625,491

1982 574,631 576,202

1983 548,726 553,581

1984 576,475 587,468

1985 602,898 614,877

1986 655,025 679,316

1987 642,731 661,094

1988 691,539 711,092

1989 690,228 711,700

1990 677,092 700,257

1991 651,721 675,496

1992 671,831 696,036

1993 687,799 712,026

1994 713,690 739,349

1995 763,988 789,153

1996 829,899 855,551

1997 899,818 927,533

1998 974,785 984,766

1999 1,063,028 1,069,653

2000 1,154,809 1,153,961

2001 1,029,507 1,020,539

2002 908,479 906,386

2003 838,523 835,952

2004 914,305 903,622

2005 990,152 980,259

n.a.–Not available.

N/A-Not applicable.

[1] Based upon the Consumer Price Index as Published by

the U.S. Department of Labor, Bureau of Labor Statistics.

[2] Business net income less loss is sole proprietorship

(Schedule C) plus partnership and S corporation income

less loss (Schedule E).

[3] For 1944 and 1945 the total amounts for interest and

dividend income were combined in the SOI reports and shown

as dividend income.

NOTES. Detail may not add to totals because of rounding.

Figure E

Major Sources of Individual Total Income

for Tax Years 1917, 1970, and 2005

1917

$13.7 billion

Salaries and wages 26.72%

Interest 6.86%

Dividends 20.8%

Business 26.66%

Other 18.89%

1970

$639.4 billion

Other 2.56%

Interest 3.44%

Dividends 2.47%

Business 6.92%

Capital gains 1.41%

2005

$7.5 trillion

Salaries and wages 68.45%

Interest 2.16%

Dividends 2.21%

Business 8.92%

Capital gains 8.87%

Other 9.39%

Note: Table made from pie chart.

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