Analyzing New US Income Tax Data

Last year, we showed you how Wolfram|Alpha could help you explore some interesting historical statistics about federal income taxes in the United States. We’ve picked up the latest available figures from the Internal Revenue Service (IRS) through the 2008 tax year, so you can revisit that data and see if previous years’ trends have held up.

Wolfram|Alpha still can’t do your taxes (and if you haven’t finished them yet, don’t forget you’ve got until Monday to file)… but it can compute some very interesting new facts about income taxes in the US. There’s been a lot of discussion and debate this year about state-level corporate and individual taxes and their impact on budgets and the overall business climate in any given state. So we’ve added data on the maximum and minimum individual and corporate tax rates in each US state, which means Wolfram|Alpha can now compute rankings and summary statistics about “income tax rates in US states” or perform a comparison of the “highest corporate income tax rates in Illinois, Iowa, and Indiana”.

Note that some states have flat tax rates, so the maximum and minimum rates will be identical, and some states don’t assess an individual or corporate income tax at all; in all other cases, Wolfram|Alpha also returns the specific income level to which a given tax rate applies.

It gets even more interesting when you start comparing these trends against other state-level statistics in Wolfram|Alpha. Try queries like “compare Ohio tax revenue, corporate income tax rate, individual income tax rate” to see relative trends in overall state tax revenue plotted against changes in state tax rate. Or look more specifically at the correlation between corporate tax rates and revenue from corporate taxes in a state like Tennessee by querying “Tennessee corporate income tax rate vs. state tax collections from corporate income”.

As a bonus, we’ve also added federal marginal tax rates (for all filing statuses) from 1913 through 2011. Try an input like “US marginal tax rate married filing jointly income $42,000 in 2011” to see the relevant tax rate for this year, as well as a plot of what the tax rate would have been on that AGI for almost the past century. And click the “Show inflation adjustment” button in the History pod, and Wolfram|Alpha will show you what the rate would have been after adjusting that income for inflation in each year.

Or if you just want to see the overall tax tables for a given year—say, 1942—type “US marginal tax rates 1942” and see how different the brackets were in the past.

There are a great deal of interesting facts, trends, and history waiting to be discovered in this data. Share some of the interesting facts that you’ve uncovered in the comments below.