Below is an article by Jonathan Karl (AP), that I happen to find on the ABC News website. I immediately copied it and pasted it here because I couldn't believe that ABC, usually so agreeable with the President's proposals, would allow a 'fact-check' on him and his "Jobs Bill" Speech. The article basically exposes Obama as being less than honest about the amount of taxes that the wealthiest Americans pay.
Treasury Secretary Geithner yesterday declined to answer a key question about the president’s proposed “Buffett Rule”: How many millionaires and billionaires pay lower tax rates than middle-income families?
The answer: not that many.
The nonpartisan Tax Policy Center has crunched the numbers and found that Warren Buffett and his secretary are the exception to the rule. For the most part, the wealthy pay a significantly higher percentage of their income in taxes than middle-income workers.
The key numbers: this year those earning over $1 million will pay, on average, 29.1 percent on federal taxes. Those earning between $50,000 and $75,000 will pay 15 percent.
That’s not to say that there aren’t wealthy people who are even better than Buffett at avoiding taxes. In 2009, 1,470 people with incomes over $1 million a year paid absolutely no taxes. But that represents less than 1 percent of those earning over $1 million a year. Raising their taxes may be the fair thing to do, but it will not bring in much revenue.
There were 236,883 taxpayers who earned more than $1 million in 2009. That’s less than two-tenths of one percent of all filers.
The Top 400 tax filers – the very richest Americans – do pay a lower rate of just 18.11 percent of their total income. Why? Many of them are hedge fund managers and people like Buffet — their income is pegged how much their investment fund grows. For some reason, this income is counted as so-called “carried interest” (even though it is not interest at all; it’s more like a performance bonus) and is taxed at the lower 15 percent capital gains rate.
It’s a loophole for hedge managers, pure and simple. But while it may be an outrage that these uber-rich hedge fund managers pay such a low rate compared to the rest of us, there are just not many of them out there.
But the top 400 tax filers represent a tiny sliver – just .00028 percent of all filers. The vast majority of those earning over $1 million a year pay at a higher rate, which is why the average tax rate for this group, according to the Tax Foundation, is 29.1 percent of taxable income. And, yes, this number includes income taxes, payroll taxes and capital gains taxes.
The numbers change a bit if you look at total income before deductions and tax credits (Adjusted Gross Income), according to another non-partisan group, The Tax Foundation. Here’s how the numbers breakdown using IRS data from 2009 on Adjusted Gross Income for the income groups at issue in this discussion:
- $10 million a year paid 22 percent.
- $1 million to $10 million paid 25 percent.
- $50,000 to $75,000 paid 7 percent.
The rate for the middle-income filers drop because many individual deductions and tax credits are phased out for higher income taxpayers.
by Jonathan Karl
Treasury Secretary Geithner yesterday declined to answer a key question about the president’s proposed “Buffett Rule”: How many millionaires and billionaires pay lower tax rates than middle-income families?
The answer: not that many.
The nonpartisan Tax Policy Center has crunched the numbers and found that Warren Buffett and his secretary are the exception to the rule. For the most part, the wealthy pay a significantly higher percentage of their income in taxes than middle-income workers.
The key numbers: this year those earning over $1 million will pay, on average, 29.1 percent on federal taxes. Those earning between $50,000 and $75,000 will pay 15 percent.
That’s not to say that there aren’t wealthy people who are even better than Buffett at avoiding taxes. In 2009, 1,470 people with incomes over $1 million a year paid absolutely no taxes. But that represents less than 1 percent of those earning over $1 million a year. Raising their taxes may be the fair thing to do, but it will not bring in much revenue.
There were 236,883 taxpayers who earned more than $1 million in 2009. That’s less than two-tenths of one percent of all filers.
The Top 400 tax filers – the very richest Americans – do pay a lower rate of just 18.11 percent of their total income. Why? Many of them are hedge fund managers and people like Buffet — their income is pegged how much their investment fund grows. For some reason, this income is counted as so-called “carried interest” (even though it is not interest at all; it’s more like a performance bonus) and is taxed at the lower 15 percent capital gains rate.
It’s a loophole for hedge managers, pure and simple. But while it may be an outrage that these uber-rich hedge fund managers pay such a low rate compared to the rest of us, there are just not many of them out there.
But the top 400 tax filers represent a tiny sliver – just .00028 percent of all filers. The vast majority of those earning over $1 million a year pay at a higher rate, which is why the average tax rate for this group, according to the Tax Foundation, is 29.1 percent of taxable income. And, yes, this number includes income taxes, payroll taxes and capital gains taxes.
The numbers change a bit if you look at total income before deductions and tax credits (Adjusted Gross Income), according to another non-partisan group, The Tax Foundation. Here’s how the numbers breakdown using IRS data from 2009 on Adjusted Gross Income for the income groups at issue in this discussion:
- $10 million a year paid 22 percent.
- $1 million to $10 million paid 25 percent.
- $50,000 to $75,000 paid 7 percent.
The rate for the middle-income filers drop because many individual deductions and tax credits are phased out for higher income taxpayers.
by Jonathan Karl
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