RICHEST GET RICHER BUT PAY LESS IN FEDERAL TAX

It’s no surprise but it’s good to have the real data. The top 400 earners saw their tax rates drop as their income soared. No one gives us this information better than David Cay Johnston. He says that these top income households have “soared to a new record high.”

“In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006, according to figures in a report that the IRS posted to its web site without announcement that were discovered February 16,” he wrote.

He continues: “The figures came at the peak of the last  economic cycle and show that widely published reports in major newspapers asserting that the richest Americans are losing relative ground and ‘becoming poorer’ are not supported by the official income data.”

The report also shows that a number of the top 400 paid an effective tax rate of zero to 10 percent. In other words, you probably paid a high rate on your city income tax.

Now wouldn’t we all like income taxes in April to be so nicely priced for us?

Only 33 of the top 400, he reports, paid an effective tax rate of 30 to 35 percent, which is the maximum (or should I say, Republican) federal tax rate.

This data was first made available during President Bill Clinton’s administration. It has been made available again by President Barack Obama. Guess what? It was made inaccessible by President George Bush. Surprised?

Cay Johnston is the former tax reporter for the New York Times. He teaches now at Syracuse University.

His entire take is available here:  

http://www.tax.com/taxcom/features.nsf/Articles/0DEC0EAA7E4D7A2B852576CD00714692?OpenDocument [1]