Saturday, April 16, 2011

Tax Returns of the 400 Highest US Taxpayers

The US IRS puts out an annual report on the top 400 US taxpayers. In 2007, the average federal tax rate paid on adjusted gross income was only 19% despite the existence of the alternative minimum tax and a top US marginal tax rate of 35%. This is because 2/3 of their income came from capital gains.

This table shows the effect of the Clinton tax increases and the Bush tax cuts:

From 1993 to 2002 significant numbers of the top tax payers paid an effective tax rate of greater than 35% but none did before or after. The numbers paying less than 15% increased significantly in the later Bush years. Warren Buffett famously said that he paid a lower tax rate than his secretary. At least I'm not paying a higher rate than these billionaires :) Though Snork Maiden is :( Of course, those US figures don't include state taxes, which don't exist in Australia. But they'd likely only add an extra 5 percentage points at most despite so many wealthy people living in high tax California and New York.

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