Carpe Diem

Top 400 taxpayers paid almost as much in federal income taxes in 2009 as the entire bottom 50%

top400

We hear all the time that the “rich don’t pay their fair share of taxes” (you’ll find more than 100,000 Google search results for that phrase).  Here’s an analysis using recent IRS data that suggests otherwise.

1. In 2009 (most recent year available), the top 400 taxpayers based on Adjusted Gross Income earned $81 billion as a group, and paid $16.1 billion in federal income taxes at an average tax rate of almost 20% (see chart above).

2. In 2009, the bottom 50% of taxpayers, a group totaling 69 million, earned collectively more than $1 trillion and paid $19.5 billion in federal income taxes at average tax rate of less than 2% (see chart above).

Bottom Line: A small group of 400 of America’s most successful earners in 2009, about the number of residents living in a typical apartment building in Washington, D.C., paid almost as much in federal income taxes as the entire bottom half of America’s 138 million tax filers, which is a population equivalent to the combined number of residents living in America’s 29 least populated states, plus the District of Columbia.  What makes this disparity possible is the fact that an estimated 47% of individual income tax returns filed in 2009 had a zero or negative tax liability.

When you have only 400 Americans paying almost as much in federal income taxes as the entire bottom 50% of American filing income tax returns, I think we can dismiss any notion of the rich not paying their fair share of taxes.  In fact, maybe the IRS should publish the names and addresses of the Top 400 (or provide a forwarding service to protect anonymity), so that we can all send them “Thank You” letters to express our gratitude for shouldering such a disproportionate share of our collective tax burden.

25 thoughts on “Top 400 taxpayers paid almost as much in federal income taxes in 2009 as the entire bottom 50%

  1. I think you have the percentages swapped in the two numbered paragraphs. 16.1 is 20% of 81 while 19.5 is 2% of 1,000.

    • That is correct – the top 400 paid about 19
      % of their income in tax, the bottom 50% paid less than 2% in tax. Seems to me that everyone should pay something… and, the top 400 could pay more – it is the 1954 code as amended that is the problem here… Overhaul is way overdue!!!

  2. There seems to be an arithmetic error:
    1. If the top 400 taxpayers paid $16.1 billion on $81 billion of income, their tax rate is 20% – not 2% as reported in Note 1, above.
    2. If the bottom 50% of taxpayers paid $19.5 billion in taxes on $1.05 trillion of income, their tax rate is about 2% – not 20% as reported in Note 2, above.

    While the numbers were transposed, the point remains that the wealthy are paying their fair share of tax.

  3. While your analysis may be correct, your bottom line lacks a shred of analysis for this claim: “so that we can all send them “Thank You” letters to express our gratitude for shouldering such a disproportionate share of our collective tax burden.”

    If you want to make this claim, then you should define what a “proportionate” share should look like? Did the top 400 payers potentially benefit from free trade liberalization laws that disproportionately affected the bottom 50%? Did the top 400 payers potentially engage in rent seeking activities that secured a portion of that income that made the economy less competitive? Perhaps the top 400 payers are potentially underpaying their true tax burden through tax shelters and other strategies? These questions may (or may not) lead to answers of what is proportionate or (dis) proportionate; however, by not choosing to ask any of them- your conclusion is essentially worthless.

  4. “…dismiss any notion of the rich not paying their fair share of taxes.” This is true and yet our politicians need to have someone to point their finger to so the blame does not fall on their shoulders. Hitler and Stalin had their enemies for the people to hate and now it’s the rich.

    It’s frustrating so I keep telling friends to just read a book out that’s a thriller only because it’s of real events happening nowadays.

    http://www.booksbyoliver.com

    Ultimately, the people do have to take a stand against the political lies and be shaking hands and not shaking fists at each other so all can unite by finding common ground. This avoids the divide and conquer the people by corrupt politicians.

  5. Anybody ever hear of a progressive tax system? That asshole in California with his Prop 13 is responsible for the degrading of America. He is a hero to us anti-Americans, him, Benedict Arnold, the Rosenbergs, all neo-cons,, AEI, etc.

  6. And that first group has over 160 million per person after taxes, while the second has just under 15k. Yes, obviously we need to tax the filthy poors more. Those lucky duckies!

    If you include Payroll/SS/Med it woud look even worse.

  7. Um, if the top federal rate is 35%, how come these 400 free-loaders paid only 20%? Nearly all their income should have fallen into the top bracket. Sounds like a good case for closing some loopholes.

    • The capital gains tax (for money made off stocks and bonds, etc.) is only 15%. Many of these people also reduce their tax liability by donating to charity. You can be almost certain that if you’re making $50 million a year it’s not coming from your hourly paying job, to which the 35% tax rate applies.

      • Shea just explained why Obama’s buffet rule wouldn’t even hit buffet.

        Its all a con to tax the piss out of small business…. and who is Warren Buffet’s biggest competitors?? That’s right, small mom and pop businesses.

        Part of the tax cuts of 2002/2003 was to allow small business owners to claim their business taxes as personal income to escape the impossibly high corporate tax rate…. Paying the 34% is a lot better than paying 39%

        But thats not good enough for Obama and democrats, they want even MORE money from small business owners, and the Buffet rule is what they came up with.

        They know the majority of their voters don’t know the difference between a capital gains and an income, so they play off their ignorance to gain the power to steal from small businesses while claiming they are only taxing the super wealthy.

  8. So you are saying that 400 individuals paid as much in taxes as the bottom 50%…the math simply doesn’t work. In 2009 there were 144,103,000 individual tax returns filed. OK, 50% of 144,103,000 would be 72,052,000- so there is the bottom 50%. You’ve compared the tax filings of 72,052,000 individuals to 400 individuals, —what happened to the other 71,652,000 individual tax filers?? They are not represented on this chart. If the chart is incomplete it is worthless. When you really look at the math, this chart proves the point that the rich are not paying their fair share.”

  9. You’re graph is misleading. You’re saying that, as a whole, the amount of tax paid by the wealthiest 400 is equally distributed, so each of them pays 20% of their income? bull crap. When their income is so terribly higher than those 50% poorest, of course the actual numbers add up by the percentage alone which they tax, which has historically been less than the average poor/middle class individual. That’s why I say you’re graph is misleading. The math is wrong. Not even adding the fact that only the lower 50% are represented, how about the other 50%? I’m sorry but your little graph is off

  10. This post goes back to the tired argument of “The rich pay more dollars in taxes than the lower 50% of Americans”. But that is not the issue. The issue is that overall, with tax shelters, offshore accounts, income from investments being taxed at half the rate as income from physical labor, etc., the rich are paying less as a percentage of their income in taxes than the upper 48% of Americans and the lower 50% are the working poor. I’m not faulting them for being rich, I’m faulting them for being greedy and unethical.

    By the way, if I recall properly, only about 10% of those on the Forbes Richest 400 in America list are self-made. The rest are heirs to parents and grandparents fortunes who’ve never really had to work a day in their lives for their money.

    Unless your personal income is greater than $700,000 a year, you are brainwashed if you are being an apologist for the the mega-wealthy.

    • How much money they make or have are none of your business. In addition, income taxes destroy the economy and create more poverty. A simple sales tax, on non-essentials, would get more from the “rich”, who you are so envious of and wish to punish.

      In addition, it is not your place to decide what is “greedy.”

    • Sorry Cory…you are brainwashed of you believe anything you just typed. Rich people don’t get rich by abusing others. They create wealth(expand the pie) through hard work and innovation. For that reason, I don’t care about trust fund babies. Taking all of their money would be mean almost nothing to the other 139M people working in this country. Besides, you democrats have been voting the Kennedy’s into office for years. When was the last time one of them worked in anything that remotely resembles the real world?
      Finally, please tell me the last non-rich guy that offered you a W-2 position. Logic tell me to be thankful for every rich guy and “aspiring-to-be-rich” guy for putting their butts on the line and creating businesses that the rest of us can work for.
      And for the record, taking advantage of Federally provided tax-deductions is not “unethical”. The government put deductions in the tax code to promote certain behavior. Because the bottom 50% of America pays almost Zero Federal taxes, it only makes sense that deductions would be taken primarily by “The Rich”.

      Logic has no agenda!

    • Here’s a novel concept: Maybe if the tax code was fair, simple, and easy to comprehend, those “evil rich evil evils” would not feel the need to shelter so much of the money THEY EARNED. Jealousy Socialists such as yourself should consider relocating to a country where you’d feel more comfortable – North Korea, Venezuela, or Greece, for instance – and leave America to people who like it here.

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