IRS DATA: Millionaires Pay 4X as Much as Middle Class in Taxes

by Robert Frank, CNBC  |  published on November 25, 2012


Warren Buffett and Mitt Romney have managed to create one of the enduring myths of our tax debate: that the rich pay a lower rate than the rest of America.

This may be individually true. Buffett pays a lower rate than his secretary and Romney pays a lower rate than most of us who make our living from salaries.

But nationally, the tax code is still broadly progressive. The more your make, the more taxes you pay as a percentage of your income.

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.

One caveat: Rates go up as income goes up — but only to a point. Once you hit a certain magic number among super-high earners, your tax rates start to fall slightly.

Read the full article: http://www.cnbc.com/id/49939444

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