How much do the wealthiest Americans make, and how much do they pay in taxes?
Bloomberg.com’s Ryan Donmoyer has a brief story out on recent IRS statistics of income. See Top Earners Averaged $345 million in 2007, IRS says Feb. 17, 2010.Here are the figures cited in Donmoyer’s report based on Tax Analysts’ data analysis presented by David Cay Johnston on Tax.com:
- Average income of top 400 US households in 2007: $345 million that’s income per year, folks
- Average income of top 400 US households in 2001: $131.1 million that’s about half
- Average effective tax rate in 2007 for this same group: 16.6% per Johnston article
- Average effective tax rate in 1993 for this same group: 29.4%
- Percent of the top 400 earners in items taxed at preferential low tax rates: about 75%
So the richest of the rich managed to do quite well in the artificial boom of the Bush years when most Americans were barely holding even or actually declining in wages. They doubled their annual income from 2001 to 2007 in the years after the Bush ta cuts that disproportionately benefited the wealthy.Johnston adds this comment in his article on Tax.com, noting that the top 400 enjoyed a 27% increase–nine times the increase enjoyed by the bottom 90%: The figures came at the peak of the last economic cycle and show that widely published reports in major newspapers asserting that the richest Americans are losing relative ground and “becoming poorer” are not supported by the official income data. These statistics evidence “two long-term trends: that income at the very top has exploded and their taxes have been cut dramatically” says Chuck Marr of Center on Budget and Policy Priorities. Donmoyer, op.cit.