Changes in Reported Income, 2007-2009

Research Report

Changes in Reported Income, 2007-2009

March 27, 2012

Abstract

Adjusted gross income (AGI) reported on individual income tax returns dropped 12 percent between 2007 and 2009, but AGI reported by taxpayers with income of $1 million or more fell by near half. Lower realized capital gains, which are concentrated among the highest income groups, accounted for three-fifths of the drop in AGI. These changes reduced the share of AGI reported by taxpayers with incomes of a $1 million or more from 16.1 percent to 9.5 percent. But the concentration of income at the very top of the distribution has begun to increase again as the stock market has rebounded.

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