Wednesday, February 16, 2005
The Tax Policy Center has published a table that states that taxpayers earning more than $10,000,000 in 2004 paid lower tax rates than taxpayers earning between $1,000,000 and $10,000,000. Among other things, it breaks down the average tax rate by cash income into various income tax categories.
According to the Tax Policy Center, the average tax rate paid by the 9,000 taxpayers earning over $10,000,000 in 2004 was 20.1%, more than 2% lower than the nearly quarter million taxpayers earning between $1,000,000 and $10,000,000. If taxpayers earning over $10,000,000 were taxed at 22.3%, the rate of those earning between $1,000,000 and $10,000,000, the federal government would have received an additional $4.8 billion in revenue.
Taxpayers who earned more than $10,000,000 paid a lower average rate than any category of taxpayer earning over $100,000. Although taxpayers in the $75,000 to $100,000 range paid 18.9% of their income in taxes, 1.2% less than those making over $10,000,000, taxpayers in the $100,000 to $200,000 range paid an average of 20.6%, or 0.5% more than those making over $10,000,000.
Furthermore, the Tax Policy Center’s analysis is described by David Cay Johnston, New York Times columnist and author of Perfectly Legal as “understating the real economic gains of those at the very top, who have perfectly legal ways to defer reporting income for tax purposes.”
The Tax Policy Center is a nonpartisian joint venture of the Urban Institute and Brookings Institution and comprised of nationally recognized experts in tax, budget, and social policy who have served at the highest levels of government.