Do the rich avoid the taxes that we all pay?

Do the rich avoid the taxes that we all pay?

Do the Rich Avoid Taxes?

Posted by David Boaz

President Obama says the rich should pay higher tax rates, citing billionaire Warren Buffett, who says he pays a lower tax rate than his secretary. Various analysts have pointed out that Buffett takes very little salary and gets most of his income in the form of dividends and capital gains, which reflect income that was already taxed once at the corporate level. But what about the broader argument, that the rich don’t pay enough in taxes, that maybe they even pay less than the middle class?

In May, the Wall Street Journal ran an article headlined, “High-Earning Households Pay Growing Share of Taxes.” John D. McKinnon reported:

Upper-income taxpayers have paid a growing share of the federal tax burden over the last 25 years.

A 2008 study by the Organization for Economic Cooperation and Development, for example, found that the highest-earning 10% of the U.S. population paid the largest share among 24 countries examined, even after adjusting for their relatively higher incomes. “Taxation is most progressively distributed in the United States,” the OECD study concluded.

Meanwhile, the percentage of U.S. households paying no federal income tax has been climbing, and reached 51% for 2009, according to a new analysis by the Joint Committee on Taxation.

An accompanying graphic shows the growing share of income taxes paid by the wealthy (in green) and how the U.S. ratio of taxes on the wealthy in relation to their income compares to that in other rich countries:

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Comments

  • ruddie08  On September 25, 2011 at 2:39 pm

    times in our country YES

    • Everette Hatcher III  On September 26, 2011 at 6:50 am

      I wanted to reply to “ruddie 08.” Thanks for your input and I must agree there is a large segment of our population that feel that the rich are not paying their fair share and then you have Warren Buffet coming along and trying to validate that view. However, look at the first paragraph of this article above: “President Obama says the rich should pay higher tax rates, citing billionaire Warren Buffett, who says he pays a lower tax rate than his secretary. Various analysts have pointed out that Buffett takes very little salary and gets most of his income in the form of dividends and capital gains, which reflect income that was already taxed once at the corporate level.”

      Michael Cook tried to pull this on Jason Tolbert last night on “Talk Business” but Jason would have nothing of it. This claim of Buffet’s is easily refuted by looking at the figures. Now you may have the view that the rich should pay double and even lose all their assets when they die with a 100% inheritance tax, but did you know that even if that happened the budget deficit would not close? IT WILL TAKE THE MIDDLE CLASS BEING TAXED MORE TO BALANCE THE BUDGET UNLESS A SERIOUS LOOK AT CUTTING SPENDING IS DONE.

      Thanks again for your input.

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