The Three Things You Need to Know About Millionaire Tax Rates
One Quarter of Millionaires Pay a Lower Tax Rate than 10 Million Middle-Income Americans
SOURCE: AP/Paul Sakuma
A new report from the nonpartisan Congressional Research Service shows that enacting a “Buffett rule” to ensure millionaires do not pay a lower tax rate than middle-class families would solve a very real injustice in our tax system. Many millionaires pay a much lower tax rate than even the lowest-income Americans. Across the country, there are millions of middle- and low-income families who are paying their fair share in taxes, while millionaires pay far less.
1) One quarter of millionaires pay a lower tax rate than 10 million middle-income Americans. There are about 94,500 millionaires who pay a tax rate of less than 26.5 percent, while 10.4 million Americans who earn less than $100,000 annually pay a tax rate greater than 26.5 percent.
2) There are more than 4,000 ultramillionaires who pay a lower tax rate than 10 million middle-income Americans. Of millionaires who earn more than $5 million a year, 4,400 pay a tax rate of 23 percent or less, while 10 million Americans earning less than $100,000 annually pay a rate greater than 26.5 percent.
3) More than half of taxpayers who earn between $100,000 to $200,000 pay a higher tax rate than 33,000 millionaires and 4,400 ultramillionaires. More than 30,000 millionaires who make between $1 million and $5 million annually pay a tax rate of 24 percent, and 4,400 millionaires who make more than $5 million pay a tax rate of 23 percent. But half of individuals who make between $100,000 to $200,000 pay a rate higher than 24.6 percent.
The fact that billionaire Warren Buffet pays a lower tax rate than his secretary is not the result of a rare trick of accounting. On the contrary, this report shows that a great many millionaires pay a lower tax rate than that faced by the secretaries and janitors who work for them. Implementing the Buffet rule would rectify a problem that is both legitimate and widespread.
Sarah Ayres is a Research Associate in the Economic Policy department at American Progress.
. Thomas L. Hungerford, "An Analysis of the ‘Buffett Rule’" (Washington: Congressional Research Service, 2011)
- Many Millionaires Do Enjoy Lower Tax Rates by Seth Hanlon
To speak with our experts on this topic, please contact:
Print: Liz Bartolomeo (poverty, health care)
202.481.8151 or firstname.lastname@example.org
Print: Tom Caiazza (foreign policy, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or email@example.com
Print: Allison Preiss (economy, education)
202.478.6331 or firstname.lastname@example.org
Print: Tanya Arditi (immigration, Progress 2050, race issues, demographics, criminal justice, Legal Progress)
202.741.6258 or email@example.com
Print: Chelsea Kiene (women's issues, TalkPoverty.org, faith)
202.478.5328 or firstname.lastname@example.org
Print: Beatriz Lopez (Center for American Progress Action Fund)
202.741.6255 or email@example.com
Spanish-language and ethnic media: Rafael Medina
202.478.5313 or firstname.lastname@example.org
TV: Rachel Rosen
202.483.2675 or email@example.com
Radio: Sally Tucker
202.481.8103 or firstname.lastname@example.org