Richest of rich see tax bills drop
On Monday, many of us will be scrambling to get our tax returns finished up and mailed out, especially those who will be sending a check to the government. But with the arrival of April 18 (pushed back from the usual April 15 this year) means all sorts of intriguing tax data.
Thanks to numbers provided by the Associated Press, we now know that the uber-rich are paying a great deal less than they were a couple decades ago.
According to the AP, the Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992. Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.
Thanks to so many available deductions and credits, a Washington think tank estimates that 45 percent of U.S. households won’t pay a dime in federal taxes.
Some more highlights from the AP story:
* The share of people paying no federal income tax has dropped slightly the past two years. It was 47 percent for 2009. The main difference for 2010 was the expiration of a tax break that exempted the first $2,400 of unemployment benefits from taxation, Williams said.
* In 2009, nearly 35 million taxpayers got a tax break for paying interest on their home mortgages, and nearly 36 million taxpayers took the $1,000-per-child tax credit. About 41 million households reduced their federal income taxes by deducting state and local income and sales taxes from their taxable income.
About 36 million families cut their taxes by nearly $35 billion by deducting charitable donations, and 28 million taxpayers saved a total of $24 billion because their income from Social Security and railroad pensions was untaxed.