Paul L. Caron
Dean



Monday, November 4, 2013

NY Times: High Income, Low Taxes and Never a Bad Year

New York Times:  High Income, Low Taxes and Never a Bad Year, by James B. Stewart:

For the superrich, 2009 was supposed to be the “annus horribilis.”

That’s the year that market averages hit their post-financial-crisis lows, and prices of nearly all assets plunged. Since the superrich depend disproportionately on assets, rather than earned income, they suffer more during hard times for financial markets since more of their assets are at risk, or so the theory goes.

Plenty of people did get hit in 2009, including people at the very top. But all things are relative. The fortunate 400 people with the highest adjusted gross incomes still made, on average, $202 million each in 2009, according to IRS data. And this doesn’t even count income that doesn’t show up as adjusted gross income, such as tax-exempt interest.

Yet the top 400 paid an average federal income tax rate of less than 20%, far lower than the top rate of 35% then in effect.

They also paid a lower rate than the top 1%, which were people with adjusted gross incomes in 2009 of at least $344,000. These affluent but hardly superrich taxpayers paid on average just over 24% of their adjusted gross income in federal income tax. Even the top 0.01%, people earning at least $1.4 million, paid 24%. ...

Even in a bad year like 2009, the federal tax code at the very top is regressive, not progressive.

NY Times Chart

https://taxprof.typepad.com/taxprof_blog/2013/11/ny-times-.html

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Comments

"Even in a bad year like 2009, the federal tax code at the very top is regressive, not progressive."

What, exactly, does it mean to say that a particular slice of the Code is regressive?

Posted by: andy | Nov 4, 2013 1:17:51 PM