OBAMA LIES AS USUAL..FACT CHECK MILLIONAIRES AND BILLIONAIRES PAY MORE THAN THEIR FAR SHARE MR. OBAMA...STOP THE LIES

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FACT CHECK: Are rich taxed less than secretaries?

Associated Press

President Barack Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are.

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said as he announced his deficit-reduction plan this week. "It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."

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.

The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office.

In his White House address on Monday, Obama called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the "Buffett rule," named for the billionaire investor.

The rule says, "People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay." Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said. "That's pretty straightforward. It's hard to argue against that."

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. But that's less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

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, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay an average of 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.

The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.

Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 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.

With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress' official scorekeeper on revenue issues.

The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.

"People who are doing quite well and worry about low-income people not paying any taxes bemoan the fact that they get so many tax breaks that they are zeroed out," said Roberton Williams, a senior fellow at the Tax Policy Center. "People at the bottom of the distribution say, 'But all of those rich guys are getting bigger tax breaks than we're getting,' which is also the case."

Treasury Secretary Timothy Geithner was pressed at a White House briefing on the number of millionaires who pay taxes at a lower rate than middle-income families. He demurred, saying that people who make most of their money in wages pay taxes at a higher rate, while those who get most of their income from investments pay at lower rates.

"So it really depends on what is your profession, where's the source of your income, what's the specific circumstances you face, and the averages won't really capture that," Geithner said.
COMMENTS ON THIS POST:

nguminh

If Warren Buffet feels he is not paying enough tax, he could send the money to me and I will pay taxes. If any one has his e-mail, please send this to him.

maxquinn Warren Buffett was paid a little over $500,00 in SALARY for running Berkshire-Hathaway - that's earned income subject to payroll taxes, nitwit. As he is only paying 4.2% on the first $106,000, his overall rate is less than that paid by any making under $106,000 (If you don't understand the math behind this, let me know and I can recommend some flashcards for you). I included the other $63.5 million in income he received in 2010 as in illustration that maybe removing the $106,000 cap on payroll taxes would really hurt him all that much.

cajunfamily

Get rid of income taxes period. Place a national sales tax on goods. No one should be exempt...then there wouldn't be loop holes or anything else...You visit our country, you buy our goods, you pay our taxes. You live in this country, you pay your taxes.

blueinoregon -------Your comments speculating others abilities to do back braking work etc . are narcissistic , grandiose and and bove all ARROGANT! Let me clue you in on one little pesky fact. The federal apparatus as it presently functioning is nothing more than A BIG BLACK HOLE . You could tax those who make over 200,000 ( which latest jobs plan does) or over 1 mill, over over 10 mill and all of the above by 99% and STILL NOT make a dent in what drives deficits. Deficits are driven by structured automatic funded liabilities. ENTITLEMENTS!

blueinoregon

"If I am 15 trillion dollars in debt now how is eliminating 4 trillion dollars in debt over ten years going to make a difference? " You have to start somewhere, this is over 30% of the debt. There are also cuts to even lower it further! I guess if I can't pay on my credit little bit by little bit over time, I should just not pay it all. You republicans, go back to school and learn some math!

tonkin

This is the facts. Earned income up to $106,000 is taxed at 4.2% (for the employee). Any income above that is not taxed for social security. PERIOD. Unearned income is not subject to SS withholding. PERIOD. . So EVERY American pays the same rate of withholding on income that is "subject" to SS. PERIOD. Now if you want to talk about unearned income, Income not subject to SS that is ok but don't try and twist the facts of what SS rates are. Besides if you know the history of SS, from the start the DEMs said, "It is not a Tax." " It is a retirement savings plan" therefore you could never deduct SS withholding from your gross income. You can't have it both ways. Is it 4:20 yet? ;=)