Effective Tax Rates of the Richest 400 Americans

Ron's comment is mistaken. The author does not wish to implement a wealth tax but instead wants to tax yearly income progressively. This is exactly what should be done. There is substantial proof that the time during which the greatest job losses in our country have taken place is the time during which taxes for the "job creators" have declined. If the job creators want to move jobs to the lowest cost areas then they must accept responsibility for the welfare of those they have displaced within their own countries.

I agree with John Vignocchi that all Americans pay too much in taxes. I disagree that the top 10% pay their fair share. The simple fact remains that 85% of the wealth in this country is owned by about 15% of the population, and out of that the top half of the top 1% own a disproportionate share. I pay 38% in income tax, medicare and social security. The IRS disallows most of my ordinary expenses including a work cell phone, my union dues and other employee expenses are only partially deductible. I was out of work for the first half of this year, I will probably earn about $56,000 in the second half, and out of that I will keep about 62% of that. Any potential refund is kept due to an excessive tax levy from an audit of my 1993 taxes which disallowed ALL my business expenses during a year I lived at the poverty level. It resulted in an additional tax of $12,000, and with penalties and interest that amount became $39,000. I have paid over $17,000 in the years since, and the balance is still about $39,000 due to the excessive interest being charged. My house is in foreclosure, I can barely pay my utilities, and have to shop at the $.99 store to buy food. Yes, the wealthy should pay their fair share. If they control 85% of the wealth, they should therefore pay at least 85% of the total tax revenue.

Truth be told that the top 10% of America’s income earners pay 70% of all federal taxes…up from 56% in 1987. ------------------ That's a great stat. Another great stat is that the top 10% makes roughly 50% of US income, up from 40% at the time. They also control 80% of the financial wealth, up from about 60% in 1989. But it's not just the top 10%, it is the ultra-wealthy that this article is addressing. It's interesting to note that the top 1% actually pays a lower tax rate than the next 9% (due to the lower capital gains tax rate). That's what this article is about. Also, before we shed too many tears for the poor top 400, their net worth increased 100 billion dollars from 2009 to 2010, and another 130 billion dollars last year. Is there any other group who is getting richer over the last couple of years?

Can anyone explain to me how changing the effective income tax rate affects job creation? I keep hearing that higher taxes will harm job creation, but I fail to see how changing the income tax of Joe CEO has any bearing on his decision as a CEO to create more jobs at his company. Is the implication that Joe is so greedy that he would raid his own company's finances, firing employees, exporting jobs or delaying new job creation, to increase his own compensation? That doesn't seem like a wise business decision nor like a decision made by a true patriot. If anything, a company might be encouraged to create more jobs and build its human capital because expenses like employees reduce taxable profits earned by companies. @mito : If you were effectively taxed 39% with dual income, your AGI would be *at least* in the $200,000 - $500,000 per year range. Congratulations! You make more money per year than 138,074,910 other tax return filers! (i.e. at least 97% of all tax filers in 2008.) If your AGI is more than $500,000 per year, you make more money than over 140 million tax filers, which is greater than 99% of all tax filers (src, cumulative sum on IRS tax data). Please do not claim you are 'upper middle class' because you are not, you're better than that!

I was horrified to discover my effective tax rate for 2010 was 39%. Being in the AMT club means you don't get to deduct state taxes, property taxes, or most deductions; don't get the 15 or 20% cap gains rate, etc. I have a high dual-income in an expensive part of the world. I consider myself upper middle class, but the government calls me rich. My boss just bought a $30m house. He takes a $1 a year salary. His effective tax rate was 19% in 2010. In most of these tax articles they completely miss what happens when you add AMT into the equation.

One more thing.... Walter also touches on taxes as a fraction of net worth, which is also known as a wealth tax. This is NOT the tax structure that exists in the U.S. It is confusing to compare our income based tax system to a total assett based tax system that does not exist here. This is the logical fallacy of the so-called 'red herring', which is basically just introducing a tangentially related idea into and argument to take the focus off of the true point of contention and thus reduce the chance of the weaker side of the argument being exploited and subsequently defeated. In any event, this wealth tax has been shown to be somewhat ineffective in places like France, where some of the wealthiest individuals moved out of the country in some manner following the introduction of the wealth tax there.

Every time I hear of a Sales tax or a low percentage flat Tax it is just another way of ripping off the lower incomes. The simple fact is the wealthy demand control of far more resources and use far more resources, then control the property of everyone else. Yet the wealthy pay far less in income tax as a percentage of income, a fraction of payroll and withholding taxes s a percentage of income and pay far, far less in taxes as a percentage of total wealth that you and I pay! Yes it is true that as a group, they pay the most money collected, but it is a fraction of their individual wealth you and I pay more individually as percent of our wealth. Here are some solutions, since the Rich apologists Cry big tears that “that it is unfair to tax people at different rates!” and are such champions of the flat tax lets just give them their wish. Only this time lets put it around the highest marginal Tax rate with one big deduction for everyone $40,000 and a flat tax rate of 40%. A 40/40 flat tax! No other deductions nothing. Remember everyone has to pay the same rate. So here is how it works, everyone gets the same deduction, $40,000 dollars, anything above 40 thousand is taxed at 40%, if you only make 38, thousand, you fill out a post car with your W2s and send it in, ( check, no Tax) if you make $60,000 subtract $40,000 that =$20,000, multiply by 40% an you pay $8,000 in tax! About 13% of your total income. For Capital gains Tax use 50/50 50,000 (deductible annually) for short term and 50/15 for long term investment in American companies Tax at 50% for foreign investment. Simple! Here is another one, now that the black-robed dictators have declare “Corporations are People too” make the corporations pay individual federal income tax and all the pay roll taxes that their employees pay. Last one, all wealthy pay the same percentage in pay roll taxes and social security, medical, unemployment and insurance no caps!! That should do it. By the way if you made $1,000,000 you would pay $380,000 a rate of 38% exactly at the pre-tax cut rate For those of you that ring your hands in Ebenezer zeal and rage in Scrooge like voices that Progressive tax “Punish the successful and reward the lazy or non-ambitious!” Let me fill you in on the ‘Dark Secret’ of the Banks and the Wealthy,… Not only do they pay a lower percentage in taxes after deductions and bookkeeping shuffling, own hundreds to thousands of times more capital than you do. They CONTROL YOUR WEALTH!!!! You do NOT! Your Stocks, Your Bonds, Your Bank Accounts, Your Retirement Plans, Your Property!! The Capital that You OWN! Even the Wealth that You Put into your House or Land that you Use as PRIVATE on any lone or advance! They use your wealth for leverage against others For THEIR benefit! Not Yours! You are only given pennies in compensation. This is the real meaning of Collateral Damage. Progressive taxes or even the mythical “FLAT TAX” that I have propose do not “punish the successful” it helps the Lower and Middle Working Class keep and Use Our Capital to become “Successful” in a bottom up economy, “A rising tide lifts all boats, Trickle Down will sink everything except “Supper Tankers” That is because the mind set of the “Free Market” model is, Capitol is finite and there is NOT enough to go around. The marketer feels that he must crush competition before it becomes a threat to his capital. A True Capitalist knows that, with Capitalism comes responsibilities, that it is the wealth and welfare of those around him that is the source of his riches. Enrich those around you and there is no limit to wealth That the Wealth of a Nation is its Labor, and Without labor there is no wealth. The Free Marketer views labor as an impediment and his neighbors as prey or powerful threats that will feed on him. The Rich have insisted that the working American pay a higher percentage in taxes than they do right now with their offshore tax havens and tax breaks and tax loop-holes. All I have done is propose that simple flat tax that the Rich have wished for so long. Everyone pay exactly the same tax everyone gets the exact same deduction . The only difference is that WE get to pay a smaller percentage of taxes for Our total wealth rather than the wealthy this time around. They have been sticking it to us for decades, all this does is turn those percentages around on to them.

How about a flat tax of 15% for everyone no deductions at all. Fair really fair!

David - Class Warfare? Thomas Jefferson must have been so envious when he stated that "[a]nother means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise." (Letter to James Madison Oct. 28, 1785). I fall within that upper tax bracket (not by much), although I tend to agree with TJ (along with a great deal of other great leaders, such as Lincoln, etc.) over you on this one.

Isn't class warfare just grand? How can you possibly justify taking more for the sole reason "because they have more" Seems like there are allot of envious people out there squeaking away wanting their share of the grease

John said, "Truth be told that the top 10% of America’s income earners pay 70% of all federal taxes…up from 56% in 1987." And they own a greater share of the wealth and income too. I'll bet it's UP more than the increase in tax paid. Look at the chart John.

Andrew..... so If I purely made my money off of buying and selling stocks I shouldn't have to pay tax on it? Does that mean I shouldn't pay tax on a lottery ticket winnings (if I played AND won, haha)? Gambling winnings? Those things were bought wtih after tax income too.

Well, we can all thank Pres. Reagan and the tidal wave of selfish ignorance that he rode into the White House. Many of the Wall St. abuses and such would not have been as bad if they knew they would be giving up 70 cents or more on the dollar for every dollar earned beyond, say, $500k. The Capital Gains Tax needs to be raised, adjusted to a progressive scale, or simply abolished. That way, it would all qualify as taxable income under the income tax. Additionally, it is a crime that Medicare/Medicaid is a flat tax. That needs to be made progressive. Social Security is even worse - it's a flat tax, a high tax (about 6.5%, if memory serves), and it only applies to the first $100k of income. On all earnings above that, these folks aren't paying a dime toward SS! If SS and Medicare taxes would be made progressive, without any maximum taxable income limits, those programs would be solvent and would actually be able to provide better service with less fraud. It costs money to pay the healthcare professionals and hospitals what they deserive, and it also costs money to hunt down fraudulent claims and prosecute those responsible. They can use the same brackets as the current Fed income tax does, and both can start at about 3% at the lowest bracket, which would be a net relief to the lower classes compared to the current system.