The top 400 taxpayers..

[Fumesucker]

http://www.ritholtz.com/blog/2010/04/top-400-taxpayers/

The IRS puts out an interesting tax document each year, looking at the returns of the nation’s 400 highest income tax paying people. The most recent year of complete data is 2007, when 143 million individuals filed tax returns.

Some of the data is quite astonishing:

• The top 400 U.S. individual taxpayers got 1.59% of the nation’s household income in 2007 — 3X the p% they got in the 1990s.

• The top 400 paid 2.05% of all individual income taxes in 2007.

• Only 220 of the top 400 were in the top marginal tax bracket.

• Average tax rate of the 400 = 16.6% — the lowest since the IRS began tracking the 400 in 1992.



Read more fascinating facts about the top 400 at the link..

[hfojvt]

1. or you could read about them here

http://journals.democraticunderground.com/hfojvt/123

Although sadly, my nickname of "the Fab 400" never caught on.

To me that would have made a good election theme to contrast the richest 400 against the rest of us and to show that Republicans took the side of the richest 400 against the rest of us. But admittedly, it did not even seem to work for me with a Democratic audience. Go figure.

[BeFree]

4. Fab? wtf?

Call them the Taxedless 400, and see what folks think.

[hfojvt]

well it was supposed to be a take on the fabled Fab 4

and their income is certainly fabulous which my Oxford desk dictionary defines as "incredible, exxagerated, absurd"

However, there may be some problem because the dictionary gives a colloquial meaning as "marvelous". Even that might fit, because marvelous shows two definitions as 1. astonishing, 2. excellent.

It is astonishing for us, and excellent for them.

So I think it fits.


Taxedless is a) too clunky and b) not accurate. They do pay an average of over $48,000,000 in taxes. Which looks large until compared to the $87,000,000 that they paid in 1995.

[JackRiddler]

40. Ha, I thought it was like, Fabrice Toure. (The Fabulous Fab, dancing in the ruins)

[BrklynLiberal]

2. DEPRESSING!!! as well as infuriating...

Wonder how many Tbaggers...screaming their guts out for tax cuts..are on that list..

[laughingliberal]

3. K & R nt

[Individualist]

5. Thank you for posting this. K&R

[Octafish]

6. Average Tax Rate = 16.6-percent.

In time of war, which in the USA is pretty much constant, that should be criminal.

[Frisbee]

26. And what do you wanna bet that quite a few of them...

made a significant amount of that money because of those illegal and seemingly endless wars?

[Obamanaut]

7. Just from the data in the OP, I got this: 400 individuals out of 143 million

paid 2.05% of all individual income taxes in 2007.

That's less that .0003% of the filers paying 2.05% of the tax burden.

How many of the nearly 143 million (less the 400) had no tax burden at all? How many not only had no tax burden at all, but received a 'check in the mail' anyway?

[hfojvt]

9. What are you talking about?

Did you miss the part about how they got 1.59% of the income?

This is what I wrote about the 47% who don't pay taxes.

What about the 47%?

Some in the media are trying to make a big deal out of the fact that 47% of Americans do not pay Federal Income Taxes. This is not new. In November of 2002, the Wall Street Journal wrote about the "Lucky Duckies" who were too poor to pay income taxes.

The fact is, that most years, I have been one of them, but I would love to pay income taxes instead of not pay them. Why? Because that would mean I was making more money. The tax rate is not 100%. If I paid $500 in income taxes that would mean I had an extra $5,000 in income that I do not have now. Even after FICA taxes that would leave me over $4,000 ahead.

Let's look at the larger picture though. In 1996, there were 13.2 million taxpayers with income over $10,000 and less than $15,000 and there were another 11.6 million with income less than $20,000 and another 28.5 million with income less than $10,000. Discounting the last group, which is probably mostly teenagers, those making under $20,000 paid $16.9 billion in taxes. Let's assume that the Bush tax cuts eliminated taxes for that group (which they didn't, but for the sake of argument). Those 24.8 million people (or families) would thus save an average of just $681.

Now, look at what actually happened with another group. What Bush called his base - "the haves and the have mores". In 1996, the top 1% paid an average tax rate of 28.9%. By 2006, they only paid an average of 22.79%. In 2006, their total income was $1.79 Trillion! Thus, they saved $109 billion thanks to the Bush tax cuts, an average savings of $80,313.

So, to compare, that's $16.9 billion saved by the poorer people and $109 billion saved by the richer people, and there are 24.8 million of the poor families compared to 1.36 million of the richer families.

Should we be upset because poorer families got $16.9 billion in tax cuts? Or should we be more concerned about the $109 billion going to people with incomes over $388,000? Who is luckier, somebody making $15,000 who got a tax cut of $681 or somebody making $38,000,000 who got a tax cut of over $2,300,000? Hey, doesn't Rush Limbaugh make $38 million a year?

http://www.koch2congress.com/7.html

[Obamanaut]

14. I'm talking about just the data that was presented in the OP - not going

to any links, nothing. Just those few numbers in the OP. Numbers like 400 of 143 million. 2.05% of the tax burden by those 400. From this we can gather that a small percentage of tax filers paid more, a lot more, than an equal number taken from anywhere in the remaining 143 million (less 400).

That's what I'm talking about. Look back at the OP. Nothing about 47%, no 1.59%, nothing.

[hfojvt]

20. no, you did bring up the people who are paying no taxes

That's the fabled 47% of RWNM fame. And to complain that 400 people are paying 2.05% seems kinda silly when that same 400 has 1.59% of the income. That happens to be from the OP - "got 1.59% of the nation’s household income in 2007"

and what does it matter if somebody brings more facts into the discussion? You object to that?

[Obamanaut]

24. It is a good thing to bring more facts into the discussion - often in each

successive response there may well be a new tidbit which will generate more discussion.

In my earlier response I did in fact glean some info from the OP, and then asked a question as part of the response. Isn't that the correct procedure?

The fabled 47% do exist, but perhaps in a smaller percentage. There are those who have no income tax burden at all, and when they file they get an 'earned income tax credit' which provides them with a check. It should not be called a refund, because they have not income tax burden to be refunded, thus, a gift.

[Fumesucker]

10. What you have left out of your post is this..

What percentage of the total *income* in the US did those 400 taxpayers have?

Not to mention that there are very few adults outside of prison in the US who pay no taxes at all.

Perhaps you should look at the "L" curve?

http://www.lcurve.org/

The US population is represented along the length of the football field, arranged in order of income.

Median US family income (the family at the 50 yard line) is ~$40,000 (a stack of $100 bills 1.6 inches high.)

--The family on the 95 yard line earns about $100,000 per year, a stack of $100 bills about 4 inches high.

--At the 99 yard line the income is about $300,000, a stack of $100 bills about a foot high.

--The curve reaches $1 million (a 40 inch high stack of $100 bills) one foot from the goal line.

--From there it keeps going up...it goes up 50 km (~30 miles) on this scale!

[Obamanaut]

11. The 400 paid a huge share of the total income tax burden, when compared to

any other group of 400.

I think there are millions outside of prison who do not pay income tax, have no income tax burden. It is true that they all pay sales tax, propertay tax if they own some, fees for license tags for their automobiles, but I thought we were talking income tax. And many don't have an income tax burden, many.

I am not a wealthy person, not by any means. But I certainly don't care that most of the rest of the country has more money than I do. Many can not say that.

[Fumesucker]

13. These top 400 also capture a huge share of the income...

When compared to any other group of 400..

That is the entire point of having a progressive tax structure, so that those who benefit the most from our system of government pay more than those who benefit less.

Or do you think those same 400 could make their kind of money in Somalia?

[Obamanaut]

17. My total tax burden was much less last year than any single one of the

400. They all, each, made a whole lot more than I did. They paid a butt load more in taxes than I did. That's progressive - they made a butt load more, and paid a butt load more.

They are not in Somalia, so it doesn't matter what I think they might have paid. I don't even know if Somalia has an income tax.

[hfojvt]

21. it's a lot less progressive than it was in 1995

and the same Republicans who think we need to cut Liheap, and education and veteran's benefits because of the deficit, do not seem concerned about giving out billion dollar tax breaks. Suddenly the deficit does not matter any more.

[Gaedel]

35. As long as

we try to sell the electorate on the logic that:

1. Tax cuts = wasteful expenditures

2. Government spending = wise investments

We shouldn't be surprised if they don't take us seriously.

Taxes have to be sold as urgent requirements for government revenue.

[hfojvt]

37. I don't see that I made those equvalencies at all

But it's a fairly basic choice, given two uses for $18 billion. We can use that for schools and roads, or we can give that in tax cuts for the 400 richest people in America. There should not be more than 1,000 people who find that to be a tough choice.

[Gaedel]

41. You make those equivalencies

Every time you refer to a tax rate reduction as "spending money".

The money belongs to the person that earned it.

A portion of that money is taxed by the government to provide money for government functions.

Even the 47% don't think that the government owns the money and allows them to keep some of it.

[hfojvt]

42. fortunately I never used that term

at least not in my last two posts on this thread. Nor did I say anything about the government owning the money.

However, language does not make for an easier way of saying "giving people a tax cut". It does work out to giving them money when you propose tax cuts.

Also, when people are making $300 million plus per year off of capital gains and dividends, I don't think it is proper to say that they EARNED it. Nor when they are a CEO who basically writes their own paycheck. Many times they get the money, or they take it, they do not earn it.

Sometimes this is true even at "lower" levels. For some reason when they hired the county administrator not only did they pay her $90,000 a year, they also gave her a three year contract. Well, she quit after two years and is apparently still gonna get paid for the third year. Did she somehow earn this $90,000?

[Fumesucker]

22. So you think a system where a person who makes ten million dollars..

And pays a hundred thousand in taxes while a person who makes ten thousand and pays a thousand is "progressive"?

I don't think that word means what you think it means..

And the point about those people not making the same kind of money in Somalia is that is the system of government here in the USA which allows people to make these ridiculous amounts of money and not have to worry greatly about their personal safety and the safety of the property and money.

[EOTE]

Progressive taxation refers to the tax rate, not total dollar amount taxed.

The overall rate of taxation for this group is around 16.6%. I paid for more than that in taxes last year, even though I made about 1/100,000th the amount that anyone in this group made. That's regressive, not progressive. And it's disgusting.

[hfojvt]

15. they got a huge share of the income when compared to any other 400

So you don't care that some people are ridiculously rich, but you DO care that some people who are fairly poor are not paying income taxes?

We need to increase taxes on people making $15,000 - 25,000 in order to spare the pitiful, overburdened super-rich?

[stillwaiting]

32. That takes a lot of brainwashing for people to think that way doesn't it??

I don't see how people can look at the tax cuts over the past few decades (at a time of war, with ever increasing deficits, etc.) while also seeing social safety net cuts and think that's okay. They're literally trying to take almost all of it. They don't give a damn about the working and middle class in this country (much less the poor). And they're averaging 16.6% income tax rates. Obscene.

They need to pay the damn SS fund back not get more tax cuts. The people who aren't paying federal income tax at this moment in time are struggling just to get by, and there are some who want to impose a "fair tax" on them so the wealthy can pay even less. Yes, that's "fair" alright.

[hfojvt]

12. there are, however, many people who pay no INCOME taxes

Especially at the federal level, and, in fact get thousands of dollars back. A family of four making $22,700, for example, assuming such a family actually exists (even a couple both working at Wal-mart would make $32,000 a year) would pay no taxes and get an EIC of $4,014 plus $800 in Obama tax credits and maybe even some refundable child tax credits. Their FICA taxes would only be $1583.55 plus their employer contribution of $1583.55, leaving them $1,646.90 ahead. Which still leaves them ahead after paying state sales taxes of $1320. And in many states they would not pay state income tax either.

As my other post details, there were 24.8 million tax filers in 1996 with income over $10,000 and less than $20,000.

[Fumesucker]

16. I was replying to a post that claimed a great many people paid no taxes..

That's a right wing meme that I don't like seeing spouted here on DU..

Even undocumented workers pay taxes, often they pay income taxes too and are never able to file so the whole sum is forfeit.

[Obamanaut]

19. Actually, it is a fact that many millions who filed, had no income tax burden

at all. Many of those even rec'd a check in the mail via earned income tax credit, which is not a credit at all, but more like a gift.

The forfeiture of income tax paid by undocumented workers is one of those 'bad luck gotcha' deals. If they were not undocumented, the income tax would not be forfeit, thus it's the price they choose to pay for being undocumented.

[Fumesucker]

23. But that was not what the post I was replying to said..

It said many millions have no tax burden.. Period.. Full stop..

That is a quintessentially right wing meme, there are few adults in the US who are not institutionalized who don't pay any taxes at all.. I suspect even Ted Kaczynski was paying some taxes in his survivalist shack out in the wilderness..

[Obamanaut]

25. Here's a link from the NY TImes that gives a figure of 10% having no

federal income tax liability, quoting the Congressional Budget Office http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

It isn't the much larger 47%, but based on 143 million filers, it is still millions.

[hfojvt]

29. that's still only INCOME taxes

whereas your original post said "no tax burden at all"

I took it to mean that you meant "no INCOME tax burden at all" and responded to it in that manner. Rather than to get into cross debate about income taxes vs. taxes.

Still, it IS wrong to say taxes instead of Federal income taxes, as if Federal income taxes are the only taxes out there. In fact, many state and local taxes are quite regressive and so are FICA taxes.

[Obamanaut]

31. Then you overlooked the first line of the message block in my first response in this

thread that does refer to income tax. The remainder of the message block did not use 'income' because I foolishly thought that had been established in the first line.

Many have no federal income tax burden, but still pay federal payroll (medicare, etc) tax from the pay check, as well as sales taxes, property taxes if they have real property, license tags fees (sorta like a tax), etc.

The top 400 make a lot more than most of us, and certainly pay a whole lot more INCOME tax than I do, even if the percentage is not as high as many would like them to pay.

[zeos3]

27. Here's some help for the overburdened 400

I don't know how many of the 143 million (less the 400) had no tax burden at all but here's how they qualify:

For the year 2010 a single individual with a taxable income of less than $8,375 is in the 0% bracket.

a joint return with a taxable income of less than $16,750 is in the 0% bracket.

a head of household with a taxable income of less than $11,950 is in the 0% bracket.

These lucky bastards don't know how good they have it!!!

I'd suggest the top 400 (those poor overburdened souls) get to work on losing their jobs or finding ones that pay less than the above figures so they won't be screwed any more.

By the way, all these people that pay no INCOME taxes have to pay 15.3% in FICA.

If you make more than $106,800 you don't have to pay part of the FICA on the excess amount. ALL of the 400 are getting a 12.4% tax BREAK because of this.

Those top 400 are so fucking stupid!!! Why don't they just sit on their asses and wait for the "check in the mail?" Dummies...

[hfojvt]

28. That's not quite true

For example, myself. In 2009 I made about $26,000 and had zero income taxes due and then also got a refund of $400 from the Obama tax cut.

How?

First, I had some $15,000 in capital gains which were taxed at a zero percent rate. So there's $1,500 that the Bush tax cuts saved me. I still think it is b.s. though. You see how that works under Republicans? If you work for your $15,000 then you pay taxes. But, if, like me, you just have $15,000 fall into your lap because you sold some land that you bought in 1987, then you pay no taxes on that money.

Then there are my wages. First, I make a contribution to my IRA. That reduces my taxable income. Then, on line 51 is the Retirement savings contribution credit. Form 8880. That gives me credit for my IRA contribution again. I generally contribute enough from my IRA to reduce my tax burden to zero with that deduction and that credit.

There are other credits too, like the child tax credit that you are leaving out, and the earned income credit. For example, a single person making $9,000 gets an EIC of $273. That is much more than his tax bill of $62.50. It still leaves him over $200 ahead.

Of course, he is only ahead if you do not count the $688.50 that he pays in FICA taxes.

[zeos3]

30. There is no conflict here.

The 0% income tax rate figures I listed are true. The FICA tax rates are true as well.

The only difference in your personal scenario is the $15K in capital gains. You paid 0% on this because you were at or below the 15% income tax bracket.

My point wasn't to list all the possible deductions and credits or to imply that those figures are absolutes, that's why you and I both use the term "taxable income." My point was to get people to stop implying that those who don't pay income taxes are "lucky" and those who do are over burdened. There's a big difference between earning even $30K or $50K and the amounts earned to place you in the top 400.

There's no way any one of the top 400 would trade places with any of us to reduce their tax "burden."

Correct me if I'm wrong, I'm assuming you don't have $15K in capital gains each year. You say you contribute to retirement (a very wise decision) and this keeps you under the taxable income limit. We all contribute to FICA so this should be included as well. This money (even though it's placed wisely) means we have less spendable income to provide for ourselves and to spend to stimulate the economy. The top 400 don't have this problem and should stop complaining or follow my advice and get to work joining us in the lower tax brackets.

[Cal Carpenter]

38. Exactly right - it's not a burden when you're a multi-millionnaire

It's like people don't think it's 'fair' that the wealthy should pay a higher percent of their income in taxes. Well how fucking fair is it that minimum wage is $7.25 an hour and other people make as much in a day as a minimum wage worker makes in a year? The burden is on the poorer people, as always, and the interests of the wealthy are protected by default. Grrr.

Sorry, didn't mean to rant at you. I totally agree with your point.

[zeos3]

45. No apology necessary.

We all need to vent at times. We agree on this issue, so I don't take rants personally.

:toast:

[krispos42]

33. Those 400 richest people also paid a total of about $3 million in FICA taxes.

400 people take come one dollar in 50 of all money made, and they paid a pittance into SSA and Medicare/Medicaid.

Let's not forget that FICA taxes are only paid on the first $106,000 of income. The top person on that list paid the same dollar amount as a my uncle, the schoolteacher in Yonkers. Since the FICA tax is about 7%, that means that making huge amounts of money effectively lowers your taxes liability anyway as virtually all of your income is not FICA taxed.


You're also forgetting consumption taxes such as gasoline. I bet the average Joe Cisxpak family in rural South Dakota pays about the same dollar amount as the Van Der BihgWhigg family in Greenwich, CT. Those F-150s get about the same mileage as a Cadillac Escalade, right? And South Dakota is, to put it bluntly, big.

Sales tax? Property tax? Taxes on telecommuniations services? Tolls? Probably much higher as a percentage of income for the Cisxpak family as the Van Der BihgWhiggs.

Well, South Dakota doesn't have any toll roads, but you get the idea.

[hfojvt]

36. they probably did not pay half of that

or maybe they did because the self employed get to pay 15.3% in FICA taxes if they make more than $500.

But FICA taxes are only paid on wages or self-employment income. They are NOT paid on capital gains, dividends, interest, rent, pensions or any other type of un-earned income. (although some of that has changed with the new health care law, which imposes medicare taxes of 2.65% on all income (but that may just have been the house version. I cannot remember if that was in the final bill or not)).

Hence Alice Walton can make multiple millions in dividends and capital gains from her partial ownership of Wal-mart and other stocks, pay no FICA taxes on it, and also pay income taxes at the lower capital gains and dividend rates which I believe top out at 15%. Far below the top rate of 35%.

She may be caught by the Alternative Minimum Tax, but, of course, Republicans have been working to demonize that and also to eliminate it.

[krispos42]

43. Wow

just... :wow:

[gmoney]

8. The baggers will be outraged...

"They only received 1.59% of the income, but paid 2.05% of the taxes! Can't you see how they're getting soaked unfairly? That's like a 30% discrepancy! Those poor, poor top 400..."

:sarcasm:

[slackmaster]

18. At least those people are paying some income tax

There are plenty of wealthy people who pay none.

[Dreamer Tatum]

34. Mindboggling: 2 cents of every fed tax dollar come from 400 filers.

Incredible.

[JackRiddler]

39. Table 4 of the IRS document shows that for the most part, it's different people each year.

Over the 16 tax years a total of 6,400 returns were identified for the table. There
were 3,472 different taxpayers representing the top 400 returns of each year. Of these taxpayers, a little
more than 27 percent appear more than once and slightly more than 15 percent appear more than twice
(see columns 2 and 3). In any given year, on average, about 40 percent of the returns were filed by
taxpayers that are not in any of the other 15 years (see columns 4 and 5). In each year, 7 (or 1.75
percent) of the returns are for taxpayers who can be found in all 16 years. Thus, the data shown in the
table mostly represent a changing group of taxpayers over time, rather than a fixed group of taxpayers.

The situation is more accurately conceived as 4,000 richest households with incomes varying depending on circumstances, out of whom 400 happen to occupy the top spots each year (with the exception of a handful of ultra- ultra- highest income earners). This is the American ownership class.

These stats are very useful, but they understate the extreme concentration of wealth in various ways.

See this thread for more:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7777568

...it's not really the top 400 earning households, it's more like a pool of the top 4,000 earning households, out of whom 400 appear to occupy the top spots in a given year. Increasingly, it's more like a pool of the top 20,000 to 40,000 households around the world who are involved in the more or less loose networks or global community of the superrich.


Most of these entities get to show whatever US income they like. They have a leeway unimaginable to most of us in the ability to defer income, reinvest it prior to taxation, show revenue as loss, show revenue in other countries, put it into their own foundations, or shift it around different institutions. (One part of an empire appears to lend money to a separate unit that is also part of the empire. Or, at the extreme, one part of an empire bets on the failure of another which runs a speculative plunder scam for a few years and then predictably goes under - the Goldman-Sachs/AIG model.)

And just plain hide it.

The assessed values of assets like multiple large real estate holdings can vary by hundreds of millions from year to year. The main flows of cash can be kept offshore and in foundations, where many of the true levers of power lie, largely unaccounted. Control of a variety of corporate entities translates into a control of a far larger multiple in assets than those that appear as individual wealth. Ultimately this class (top half percent at most) also owns the largest voting shares in the big banks and corporations (in US and increasingly worldwide as a single global class). Thus they own and can control the majority of the economy.

The absolute largest fortunes are unlikely to appear on this list. They are older money that has diversified into many holdings and is administered by foundations or obscure structures of holding companies owning holding companies. These complexes (or "empires") maintain whole tribes descended from robber barons, but generally there is one monarch or small group actually running the empire at any given time (e.g., for the Rockefellers over the last half-century that would have been David). They rise and fall, but generally maintain stability through the generations. They can reach more easily into politics in the guise of charitable and political institutions (from the Koch complex on the "screw everyone" right financing the Teabaggers, to the Rockefellers on the "noblesse-oblige" right financing ostensible social initiatives, which bizarrely is called "liberal").

Some on the top 400 list of income earners are relatively trivial fortunes of the moment garnered from single-source successes (sports, pop/movie stars, overnight Internet fortunes). These may not yet have diversified and institutionalized themselves via foundations and the like. They may be household names, but they don't have the power yet of the established empires. These occasionally crash and burn. They also provide a spectacular version of the life of the rich that helps to divert attention from the majority of the rich. Instead of Mellons or some demented European aristocrats dating back to the Hohenzollerns, people think the world's owners are Tiger Woods and Tom Cruise.

Recently we saw how the Gates fortune diversified and institutionalized itself for the next century. The Gates were able to present this logical business move as "giving away their money." This is the classic process by which robber barons appear to turn into "philanthropists," perhaps the most important PR term ever invented by the well-paid propagandists of the super-rich. (If it's a give-away, how is it that a century later most of the supposedly given-up fortunes are still around, telling you they're bringing you NPR and PBS for free?)

And all that still doesn't account for the shadow world of the multinational spook and criminal industries (arms, drugs, money laundering, smuggling, bust-outs, etc.) or the religious enterprises ("churches") who get to evade taxation and accounting and accumulate vast fortunes while having an enormous impact in shaping politics and society to their advantage.

Finally, even for the large portion of the total income tax collected that they do pay, you can be certain that the superrich get more back in the way of corporate welfare and other government services:

SNIP MORE AT LINK

[Fumesucker]

44. Those graphs are truly remarkable..

We're back to another Gilded Age.