Needless to say this has been proven wrong over and over. Just in the past decade, tax rates were decreased to their lowest levels in over 50 years (I have also previously posted an interview with Warren Buffett who acknowledged the inequality in our current tax system stating that his secretary pays more in taxes than he does).
The IRS has released data on the tax rates for the 400 richest Americans in 2008.
The IRS report shows that in 2008 (the latest year for which data are available), the 400 richest income tax filers paid just 18.1 percent of their adjusted gross income (AGI) in federal income taxes. That is down from 22.3 percent in 2000, and is just more than half of the top statutory income tax rate of 35 percent. More than half of the income reported by those 400 taxpayers consisted of capital gains and dividends subject to the preferential rates.
The IRS report, which shows the effective federal income tax rates paid by the 400 highest-income Americans in each year since 1992, offers an important opportunity to understand how the tax system affects the most privileged Americans.
- Only those with at least $109 million of AGI were members of this group in 2008, and the average AGI for these 400 taxpayers was $270 million.
- Each one of these 400 taxpayers enjoyed, on average, more than $155 million of net capital gains and dividend income that was subject to special lower tax rates in 2008.
- Although 400 returns are less than 1/1000th of a percent of the total individual tax returns filed, these 400 taxpayers collected more than 10 percent of the total preferential-rate capital gains and dividends in the nation in 2008.
- These 400 taxpayers paid income taxes averaging just under $49 million in 2008. As a share of AGI, their tax bills averaged 18.1 percent.
- This decline from 22.3 percent to18.1 percent represented a total tax cut of $4.5 billion in 2008 for this group, or an average tax cut of over $11.3 million each.
“This valuable data confirms what we already knew—that the very richest Americans are paying much less of their income in tax than many would have us believe,” noted Citizens for Tax Justice director Robert S. McIntyre. “These taxpayers are now paying lower effective tax rates than at virtually any time since the IRS began publishing these data in 1992—and the Bush Administration’s capital gains and dividends tax cuts are the main culprit.”