2 April 2012 0 Comments

1% of 1%: The Top 400 Adjusted Gross Income Earners

TaxProfblog brings this NYTimes story to our attention:

Mitt Romney paid 13.9% federal tax rate

Among the 400 Americans with the highest adjusted gross incomes in 2008, 30 of them paid less than 10% and another 101 paid less than 15%

The top 400 paid an average of $49 million, or 18.1% of their AGI, in federal tax — lower than taxpayers in the $200,000 to $500,000 bracket.

They reported an average $14.1 million in state and local taxes, bringing their total income tax level to about 23% of AGI.

And not one of them paid more than 35% of their AGI in federal tax.

 

                       

23% is quite a bite and I, somehow, think these 400 will use their wealth more productively than the government. But, when people making hundreds of millions a year are paying a substantially lower rate than others, something is wrong with the tax code. The Redistributionists, Socialists and Democrats will argue for a “soak the rich” tax and others, like me, will argue for a reform of the tax code to a simpler one with fewer, if any, deductions, a flat tax or a national sales tax, lowering the rate and broadening the base. It is obvious from this NYTimes articles that the “progressive” tax code is not working the way many of us thought.

    Milton Friedman’s reply to the woman who makes the common argument  justifying taking money from the rich is worth listening to, in my opinion. Video 4 minutes

 

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