UPDATE: I want to add to this post as I get new information and statistics. If you come across something that’s worth adding, please email me (JLP – at – AllFinancialMatters.com) with a link to the source and I’ll post it along with a link to your blog (if you’re a blogger).
I want to share with you a couple of things I read in the WSJ over the last two days. The first is a quote from yesterday’s article (September 19, 2011):
The average tax rate for the top 400 earners in the U.S. fell to as low as 16.62% in 2007 from a recent peak of 29.9% in 1995. It ticked up again in 2008 to 18.11%, according to the latest annual Internal Revenue Service analysis of returns. Capital gains represented a very high proportion of the top earners’ incomesâ€”about 56.7% on average.
Despite this decline, the share of taxes paid by wealthier Americans has been rising, in part because of soaring incomes and also tax breaks for the working poor and the middle class. The top 1% of the taxpayersâ€”those with income above $353,000â€”got 19.4% of all income in 2007 and paid 28.1% of all federal taxes. In 1987, by contrast, the top 1% got 11.2% of all income and paid 16.2% of all federal taxes.
The second is a graphic from The Buffett Alternative Tax in today’s (September 20, 2011) Review & Outlook section of the WSJ. The point of the opinion piece was that the alternative minimum tax was started in an effort to make sure millionaires paid their fair share. Forty plus years later and look at what we have. Anyway, there is the graphic I wanted to share: