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C. Alan Joyce

Historical U.S. Tax Statistics in Wolfram|Alpha

April 16, 2010 —
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Wolfram|Alpha couldn’t do your taxes for you this year, but we did just wrap up a quick project to add some interesting historical tax statistics. Now that all of our U.S. users have filed their taxes (we hope), they can explore IRS data about individual income taxes, broken down by adjusted gross income (AGI), from 1996 to 2007—the latest year for which the IRS has released statistics broken down by AGI. Users can also investigate less-detailed data about sources of individual taxable income from 1916 to 2007.

The basic input for this new dataset is simply an income, such as “AGI $35000”—type it in, and Wolfram|Alpha matches that input to a specific AGI bracket (in this case, $30,000–$40,000) and calculates a broad range of statistics.

First, the average effective federal tax rate, which is calculated by dividing total tax receipts in this bracket by total adjusted gross income:

Average effective tax rate for AGI $30,000–$40,000

Next, the average tax paid in the input’s bracket—which in this case dropped by nearly 50% over the decade covered by this dataset. You’ll also note that nearly a quarter of all tax returns in this AGI bracket had no tax due:

Average tax paid

Third, average exemptions and deductions for all taxpayers in the input’s bracket. In this case, those increased by nearly $4,000 over this period, and in 2007 accounted for an average of 48% of AGI:

Average exemptions and deductions

For some particularly interesting numbers, try asking about high income brackets (average tax on AGI $400k, average exemptions and deductions on $5 million) and very low brackets (average tax on AGI $500).

And keep in mind that you can incorporate any of the values from this dataset in other Wolfram|Alpha inputs—which makes it possible to uncover some startling trends. Try computing “taxable income from salaries 1974 / us gdp 1974” and you’ll see a surprising decline in salary income relative to GDP over the last few decades:

Computing "taxable income from salaries 1974 / us gdp 1974"

Wolfram|Alpha also displays the maximum marginal tax rate for the specified income, and computes distributions of the number of individual tax returns and total tax receipts, both broken down by income bracket. You’ll note that this input’s bracket falls very close to center—just under 50% of returns claimed an adjusted income of less than $30,000, and a little more than 40% claimed more than $40,000:

Maximum marginal tax rate

Yet the vast majority (more than 95%) of taxes collected by the IRS came from returns claiming an income of more than $40,000:

Tax receipts for $35,000 salary

Finally, for a slightly deeper historical perspective, Wolfram|Alpha also computes a breakdown of sources of individual taxable income all the way back to 1916:

A breakdown of sources of individual taxable income since 1916

We’ll work on expanding this data set over the coming year, but in the meantime, let us know if you compute any surprising statistics about taxes and taxable income in the United States.


Some very startling trends there, no wonder our government has no money

Posted by Steven Sanderson April 22, 2010 at 2:18 pm

Awesome post. I will be bookmarking and sharing it with my social community.

Posted by fixed annuities August 17, 2010 at 10:10 am