Tax Analysts Blog

America's Top 20 Zip Codes and the Taxes They Pay

Posted on Feb 14, 2011

The good folks at the Statistics of Income Division of the IRS compile individual tax returns by zip code. They take a lot of steps to preserve confidentiality: no zip codes with less than 10 filers are included. And if any one return dominates a data entry that return is either dropped or merged into another total. Still we are left with a fascinating and unique view of America's tax geography.

The super rich in these zip codes typically pay federal tax equal to about 20 percent of their adjusted gross income. On these returns, deductions for state and local taxes (8% of AGI) and charitable contributions (5% of AGI) help keep taxes low. But the dominant factor accounting for their low tax rates is the 15-percent rate of capital gains and dividends On these returns capital gains and dividends account for a whopping 64% of total income.

20 Zip Codes with Highest Average AGI in 2007

Table 1.pdf

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