Sources of pretax comprehensive income, by income group, 2007 (2011 dollars)

	Income fifth					Breakdown of top 10%
	Bottom	Second	Middle	Fourth	Top	90th–<95th percentile	95th–<99th percentile	Top 1 percent	Average all households
Households (millions)	24.6	22.2	22.9	23.0	23.7	6.0	4.7	1.2	116.88 (Total)
Share of total pretax income
Wages	50.5%	59.3%	60.5%	63.2%	48.4%	61.8%	55.6%	26.7%	54.3%
Proprietors’ income	6.0	2.6	1.9	1.6	2.6	2.8	4.8	1.6	2.4
Other business income	0.1	0.6	0.9	1.1	8.2	3.3	7.3	15.5	4.6
Interest and dividends	1.0	1.2	1.9	2.6	7.6	5.0	7.1	12.1	5.2
Capital gains	0.3	0.4	0.6	1.1	13.8	3.8	6.3	31.3	8.1
Pensions	1.9	4.1	7.1	8.2	5.2	7.6	5.9	1.1	5.8
Cash transfers	20.3	12.2	9.6	6.6	2.3	3.3	2.3	0.4	5.7
In-kind income	15.4	13.1	11.1	8.7	3.6	5.2	3.5	0.6	6.9
Imputed taxes	4.4	5.1	5.3	5.7	7.3	6.5	6.0	9.5	6.5
Other income	0.2	1.4	1.2	1.2	1.2	1.2	1.0	1.3	0.6
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Average
Wages	$10,082	$27,346	$42,341	$64,528	$139,009	$121,552	$174,477	$542,615	$56,561
Proprietors’ income	1,198	1,199	1,330	1,634	7,467	5,511	15,008	32,516	2,500
Other business income	20	277	630	1,123	23,551	6,580	22,803	315,001	4,792
Interest and dividends	200	553	1,330	2,655	21,828	9,890	22,130	245,904	5,416
Capital gains	60	184	420	1,123	39,635	7,451	19,908	636,099	8,437
Pensions	379	1,891	4,969	8,372	14,935	15,047	18,435	22,355	6,041
Cash transfers	4,053	5,626	6,719	6,739	6,606	6,410	7,082	8,129	5,937
In-kind income	$3,075	$6,041	$7,768	$8,883	$10,339	$10,138	$11,039	$12,194	$7,187
Imputed taxes	878	2,352	3,709	5,820	20,966	12,745	18,971	193,065	6,771
Other income	40	646	840	1,225	3,446	2,362	3,245	26,419	625
Total	19,965	46,114	69,985	102,102	287,208	196,838	313,616	2,032,265	104,163
Shares of total income categories claimed by each group
Wages	3.8%	9.2%	14.7%	22.5%	49.9%	11.0%	12.4%	9.9%	100.0%
Proprietors’ income	9.8	8.8	10.1	12.5	58.8	11.0	23.4	13.0	100.0
Other business income	0.1	1.0	2.4	4.3	92.3	6.5	17.7	62.5	100.0
Interest and dividends	0.8	2.0	4.9	9.8	82.6	9.5	16.6	47.1	100.0
Capital gains	0.2	0.4	1.0	2.6	95.8	4.6	9.5	77.9	100.0
Pensions	1.3	5.9	16.0	27.1	49.7	12.7	12.2	3.8	100.0
Cash transfers	14.4	18.1	22.3	22.5	22.7	5.6	4.8	1.4	100.0
In-kind income	9.0	16.0	21.3	24.4	29.3	7.3	6.2	1.7	100.0
Imputed taxes	2.7	6.6	10.8	17.0	62.9	9.7	11.3	29.3	100.0
Other income	0.7	9.9	13.3	19.5	56.6	9.8	10.6	22.0	100.0
Average	4.0	8.3	13.1	19.1	55.5	9.6	12.0	19.9	100.0

Source: Authors' analysis of Congressional Budget Office (2010)

Documentation and methodology

Underlying data are from the Congressional Budget Office, Average Federal Taxes by Income Group, “Sources of Income for All Households, by Household Income Category, 1979 to 2007” [Excel spreadsheet]. Shares of pretax income, by income source, are given by CBO for the bottom, second, middle, fourth, and top fifth, and the top 10, 5, and 1 percent. Average pretax income is defined as the sum of each income groups’ wages, proprietors’ income, other business income, interest and dividends, capital gains pensions, cash transfers, in-kind income, imputed taxes, and other income. For the purposes of this chapter, capital income is defined as the sum of capital gains, interest and dividends, and other business income categories. Sources of income for the groups are calculated by multiplying the shares of each income source by average pretax income. To calculate average pretax income by source for the 95th–< 99th percentile, the aggregate incomes of the top 5 percent were subtracted from the aggregate incomes of the top 10 percent and divided by the total number of households in the 95th–<99th percentile. Aggregate income is calculated by multiplying the number of households in each income group by average pretax income source. The number of households is calculated by subtracting the number of households in the top 5 percent from the number of households in the top 10 percent. The same calculation is done for the 95th–<99th percentile using the top 5 percent and the top 1 percent. The share of total income categories claimed by each group is calculated by dividing the aggregate income for each income source in each income group by the total aggregate income for all households, minus negative income. Data are inflated to 2011 dollars using the CPI-U-RS.