The Fortunate 400

Posted: 16 Aug 2003

See all articles by Joel B. Slemrod

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)


This June, the Statistics of Income Division of the IRS released selected tax return information for 1992-2000 concerning the 400 taxpayers with the highest adjusted gross income (AGI) - the Fortunate 400 - in each year. A press release issued by Jim Sexton, chairman of the Joint Economic Committee, characterized the data as meaningless and misleading because of the year-to-year fluidity of the identities of the 400.

In this report, Slemrod concludes that, although there are caveats to the interpretation of such snapshots of income distribution, these data shed light on several critical policy issues. He says they confirm that AGI is highly concentrated. A group that in 2000 represented less than 1 out of every 300,000 taxpayers received more than 1 percent of total AGI. Moreover, the share of total AGI received by this group more than doubled between 1995 and 2000. The average tax rate on the Fortunate 400 declined by more than 7 percentage points between 1995 and 2000, at the same time the average tax rate for all taxpayers increased. The decline was primarily due to the preferential rate on capital gains, which applied to a large and growing fraction of the AGI of the Fortunate 400, and which fell in 1997.

Suggested Citation

Slemrod, Joel B., The Fortunate 400. Tax Notes, Vol. 100, No. 7, August 18, 2003. Available at SSRN:

Joel B. Slemrod (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Room R5396
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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