Are the Rich Taxed Less than Secretaries?
September 23, 2011
President Barack Obama makes it sound as if there are millionaires all over America paying taxes at lower rates than their secretaries. The data tell a different story, says the Associated Press.
- On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data.
- They pay at a higher rate, and as a group they contribute a much larger share of the overall taxes collected by the federal government.
- This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes and payroll taxes, according to the Tax Policy Center, a Washington think tank.
- Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.
Lower-income households will pay less.
- For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes.
- Households making between $20,000 and $30,000 will pay 5.7 percent.
Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.
Source: Steven Ohlemacher, "Fact Check: Are the Rich Taxed Less than Secretaries?" Associated Press, September 20, 2011.
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