Bamboozled: The rich do pay a higher tax rate than middle class
We’ve been telling you this for years. You can pick out individual cases where really rich people – especially those living exclusively on dividend income – pay a lower effective federal income tax, but that is rare. For the 2010 tax year, IRS data proves millionaires payed an average tax rate of 20.4 percent, while the middle class paid between 5 percent and 8 percent, three to four times less than the rich!
From CNBC, of all places. Isn’t it interesting how the IRS released the 2010 individual tax statistic a couple of weeks after the election?
According to new data from the IRS, people who make $1 million or more had an average tax rate of 20.4 percent in 2010. Tax filers who earned $30,000 to $50,000 paid an average rate of 4.8 percent, while those who made between $50,000 and $100,000 paid 7.7 percent. Those making under $30,000 had a negative effective rate, meaning they paid no federal income taxes after deductions and credits.
Put another way, millionaires pay a rate that’s more than four times that of the middle class.
Wait, but what about all of those cute little graphics my friends post on Facebook?
The average tax rate peaks at 25.1 percent for those making between $1.5 million and $2 million.
After that it starts to go down, and falls to 20.7 percent for those making $10 million or more.
So even someone that makes $10 million pays almost three times the rate of a family making $80,000? Why do we not hear about this?
When people point to Warren Buffet’s total income and hist tax rate compared to his secretary, those are what are referred to as outliers. They are the absolute exception and you’ll realize that if you take a few minutes to study the new data for 2010.
I’ve been writing about the 2009 data for quite some time now. I’ll soon dive into the 2010 figures that will not represent much of a change in overall perspective, but I hope you’ll share this and future information with liberals, Democrats and those who voted for President Obama.
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