The fortunate 400

By David Cay Johnston
June 6, 2012

Six American families paid no federal income taxes in 2009 while making something on the order of $200 million each. This is one of many stunning revelations in new IRS data that deserves a thorough airing in this year’s election campaign.

The data, posted on the IRS website last week, brings into sharp focus the debate over whether the rich need more tax cuts (Mitt Romney and congressional Republicans) or should pay higher rates (President Obama and most Democrats).

The annual report, which the IRS typically releases with a two-year delay, covers the 400 tax returns reporting the highest incomes in 2009. These families reported an average income of $202.4 million, down for the second year as the Great Recession slashed their capital gains.

In addition to the six who paid no tax, another 110 families paid 15 percent or less in federal income taxes. That’s the same federal tax rate as a single worker who made $61,500 in 2009.

Overall, the top 400 paid an average income tax rate of 19.9 percent, the same rate paid by a single worker who made $110,000 in 2009. The top 400 earned five times that much every day.

Just 82 of the top 400 were taxed in accord with the Buffett rule, which proposes a minimum tax of 30 percent on annual incomes greater than $1 million.

Let’s return for a moment to the single worker who made $61,500 in 2009 and paid 15 percent of his salary in federal income taxes. The top 400 made more every three hours than he did in a year, and yet many of them paid the same or a lower tax rate, according to the data in the report.

On top of his $9,225 federal income tax, he also paid $9,409 in payroll taxes, which include Social Security and Medicare taxes. Half of the payroll tax was deducted from his check. His employer paid the other half, which was really hidden wages taxed at a 100 percent tax rate.

His total federal tax burden was 30.3 percent, exactly 50 percent more than the 20.2 percent tax burden, measured the same way, on the 400 at the top.

TWO TAX SYSTEMS

This comparison illustrates how Congress has created two income tax systems, separate and unequal, burdening millions much more heavily than the few, those with gigantic incomes and a propensity to make campaign contributions.

One system is for wage earners and pensioners, whose taxes are withheld from their checks. This rigorous, efficient system taxes them fully.

The other system is for business owners, executives, managers of hedge and private equity funds, name brand athletes and entertainers, and many others with huge incomes. Congress lets them put unlimited amounts of income in sheltered accounts and put off paying taxes for years or even decades.

Deferral does not prevent these super rich Americans from spending their money. Hedge fund managers and others can borrow against their untaxed wealth, currently at interest rates close to zero. So long as their wealth grows faster than their borrowing their net worth continues to increase.

The IRS report covers only the 400 highest incomes reported on tax returns, not the 400 highest actual incomes, which I am certain are much larger on average because of deferrals. That means the report overstates the tax burdens of the richest Americans pay.

The issue we need to debate is not how much you earn — make all you can. The issue is that everyone should pay their taxes now, not in some far-off tomorrow, and as you go up the income ladder so should your tax rate.

By what economic, political or moral standard should working stiffs be forced to pay their taxes immediately, while plutocrats pay their taxes by-and-by? And why should anyone who makes more than $200 million live tax-free?

Those are questions to ask candidates on the hustings, insisting they give specific, focused answers.

To give this a sense of scale, the top 400 are financial giants compared to Mitt Romney. It took Romney a quarter century of smart work to build up a fortune that his campaign says is between $190 and $250 million. The top 400 made about that much in one year.

Romney says that those of us who tell these hard facts about the zero-to-low tax burdens of the richest Americans are promoting class warfare. Income inequality, according to Romney, should be discussed only “in quiet rooms.”

If you agree with Romney then keep quiet. If not, now is the time to spread the word and encourage robust and thoughtful debate, just as the framers of our Constitution intended.

33 comments

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The President,as leader of his party, once again expressed that every American should pay his fair share in taxes. One sizable loophole in the Federal Tax Code is TAX EXCLUSION INCOME. It is time to do something about this unfair tax revenue placed disproportionately on small business & especially the self-reliant. The President is correct we are all in this mess together. It is time to correct the inequity of Tax Exclusion income for some rather than for all workers earning income & paying taxes on all received income. There is no reason for this inequity especially after the President many request for equity.

Posted by buckaroo5 | Report as abusive

Wow !

Awesome article and an eye opener. If Romney says this is class warfare, whose fanning the warfare pitting neighbour against the school teacher?

To me that is ansother distractions to make the middle class fight each other for nothing, and never realize who is doing what !!!

Posted by American213 | Report as abusive

You say that “everyone should pay their taxes now.” So, if the value of your house goes up by $1,000, even though you haven’t sold it, you think you should pay tax on the unrealized gain? And, if it goes down in value, do you expect to receive a refund? Its hard for me to understand how that makes sense, especially when you consider how much it would cost to run/enforce such a system. Furthermore, when people talk about capital gains tax rates it seems to be lost on them that the money that was invested has already been taxed, in most cases as ordinary income. Arguably it would be more balanced to compare the tax rates of one persons investment income to the tax rate for another persons investment income, not their ordinary income. While their is an obvious populist angle to saying “tax the rich” if you polled most middle income americans and told them that you were planning to tax any money they made on their investments (including appreciation in their homes) at ordinary tax rates they would be appalled. The best strategy for the tax code would be to simplify it by removing all of the exceptions and preferences (at both a corporate and personal level), maintain the progressive structure of it, but understand that “the rich” can’t carry the burden for the entire country (where over 50% of the population currently pays no net effective tax), and to have everyone pay some amount of tax so that the notion of a “free lunch” is removed from people’s mindset.

Posted by USA4 | Report as abusive

The article makes no distinction between traditional salary type income and capital gains income. Many people think the lower capital gains tax rate is terribly unfair.

Those same people magically change their opinion when they sell a house they bought 15 years ago at a $100,000 profit.

Oh well, facts be damned, DCJ needs to fan the flame of class warfare.

Posted by jambrytay | Report as abusive

Columnist here….

@ USA4,what you imagine is not what I wrote at all.

Capital gains are due when an investment is sold, but Wall Street has come up with devices (many of which I have explained over the years) that let people get the benefit of gains without being taxed, giving them an incentive to never sell.

Congress lets most Americans defer only small sums, from the thousands to a few tens of thousand, but those at the top can defer unlimited sums. Defer for 30 years, any good tax attorney will tell you, and you have achieved the economic equivalent of not paying the tax. Invest untaxed money, borrow against the gains from that untaxed money and you pay no tax.

Most Americans have little or no capital income and their 401(k) savings are taxed at ordinary rates when money is withdrawn. A majority of Americans also have no taxable interest.

Under Reagan all income — wages, interest, capital gains and dividends — was taxed at the same rate.

Posted by DavidCayJ | Report as abusive

After hearing all these, I do not feel like paying any more taxes and I make less than $100K. How many folks are in my team?

Posted by rahie | Report as abusive

Note to USA4 and jambrytay: a capital gain from the sale of your principal residence is not taxable income, provided that you have lived there for at least two of the last five years.

For more details, see IRS pub. 523 (http://www.irs.gov/publications/p523/in dex.html)

Posted by SBayer | Report as abusive

I realize the focus of this opinion piece is on the top 400, but the graph actually illustrates a point often overlooked in the “fair” taxation debate. The highest earners DO pay a higher percentage of federal taxes. The shape of the curve(except at that extremely top end) shows a progressive increase of percentage with income. Earners in the $100-200k category pay less than half as much (in percentage) as the 500k plus categories. Seems to me as if the tax system works well in the vast majority of cases, unless you believe that top earners need to pay more then 25% of their AGI to the Federal government.

Posted by sthater | Report as abusive

According to Romney there are only two options- keep the status quo or engage in class warfare. The idea that minor, historically unimpressive changes to tax rates is somehow equal to class warfare is a hopelessly reductionist, dummy-friendly soundbite in the first place. Anyone repeating it might as well just be reciting jingles from TV ads.

There’s really no way to talk your way around people making 200 million a year paying zero taxes. Sure, closing those loopholes won’t fix the economy or balance the budget, but that’s just a dummy-friendly reductionism; ie if it doesn’t fix everything it’s not worth doing.

Posted by spall78 | Report as abusive

My problem with class warfare is that it potentially leads us to wrong solutions. Class warfare is used by some politicians to justify tax hikes. If you look at future government revenues (taxes) and government spending, you’ll see that one of these curves (spending) is way out of whack, so suggestions that say tax hikes (justified with class warfare rhetoric) will fix our deficit problems are very misleading.

Posted by jambrytay | Report as abusive

My problem with class warfare is that it potentially leads us to wrong solutions. Class warfare is used by some politicians to justify tax hikes. If you look at future government revenues (taxes) and government spending, you’ll see that one of these curves (spending) is way out of whack, so suggestions that say tax hikes (justified with class warfare rhetoric) will fix our deficit problems are very misleading.

Posted by jambrytay | Report as abusive

Yeah- the funny thing is it provides no data as to WHY the tax rates were where they were- did the high earners invest in tax free municipal bonds? Did they suffer huge business losses that were carried forward from a losing year? Did they donate large amounts to charity? Did they invest in wasting assets that don’t make money every year? Did they invest in R&D that could not be expensed in the year of the investment? Did they make huge capital investments that are expensed over 5 or 7 years?

Do we really want to do away with R&D, charitable donations, business investment, tax free bonds that keep the cost of government borrowing low, or any of the other legitimate deductions that make our system so “unfair”?

I have to lose a dollar in order to save 25 cents in taxes. I’ll also point out that it is MY dollar that is lost, not the taxpayers. So- when I lose money on a business deal, the government loses 25 cents per dollar lost.

When the government loses money on a business deal (stimulus, Solyndra, etc. ) it loses 1 dollar for every dollar lost.

Which way is the better deal for the taxpayer?

Seems pretty simple to me.

Posted by TreyGerrit | Report as abusive

It isn’t class warfare to ask those who benefit most from the economic system to pay the most in taxes. For example, most people don’t use the courthouses, jails, police, and other services needed to enforce legal contracts that make these businesses viable.

But it’s also a fairness issue: at some point the benefit of an individual (or family) holding on to yet another dollar is outweighed by society’s need to put that dollar to better use, one that benefits all society not just that individual. When you consider someone who has $100 million in the bank can earn at 3% interest $3,000,000 a year, $250,000 a month (five times the median income for a year of hard work) for breathing, can society afford to let that person (or family) have a dollar more when we need the money to repair infrastructure (apparently three trillion behind over the past 30 years due to de-taxation), provide health care, take care of the elderly, and so on?

The biggest con is saying de-taxing extreme wealth creates jobs. If you took the same $100 million and gave it to one person and another $100 million and split it into $50,000 chunks and gave it to 2,000 people, with the caveat neither group could earn another dime for the next year, the economic activity generated by the 2,000 would swamp the individual. The 2,000 would spend on food, clothing, and shelter. The individual, past some point, would slow their spending to ensure they had money left over.

The same dynamic applies when you tax extreme wealth and use the proceeds to build infrastructure: you create more jobs sustainably over time than if the person kept the dollar.

There are many countries in the world that manage to balance the competing economic, social, and political interests in their society. In different ways, too. Without suppressing wealth or individual freedom. The US since Reagan has policies that benefit extreme wealth and large global corporations at the expense of the rest of our society. Unlike other countries, we burden our kids with college debt, for example.

Therefore, highlighting these issues is a critical first step in educating people that we need to organize our society to be more fair to more people. We did it post war, from 1945 through the 1970s. We need to do it again.

Posted by FredFlintstone | Report as abusive

So, let me be naive here. Income tax is easy to calculate for wage-earners. More complicated for financial and other tall earning types, and income tax fails there. Maybe don’t drive a nail with a screwdriver. In tax theory the three legged stool is income tax, sales tax and wealth tax. Once forty percent of the wealth is concentrated in the few, then income tax will not repair that, nor will the sales tax, but only a wealth tax will.

Why not engage in a campaign for a wealth tax, the only tool that will fix the already existing inequity. I said I would be naive. Nevertheless, the 99% might like the idea.

And what about a steeply progressive campaign tax, which after all is a transfer payment to the media industry. It seems the only way to halt the Murdock style invirtuous circle of press buying power, and power funding press laundered through the political process… so corrupt.

Posted by TheOldSodbuster | Report as abusive

We’re not talking about class warfare in the US. Class warfare happened in the French Revolution, in the Chinese Communist Revolution, etc. What we’re talking about is an increasingly widening disparity in wealth, allowed through clever people influencing a supposedly democratic system in order to get their way, which happens to be greed. An example of their propaganda is misuse of a term such as class warfare in order to create a straw man and deflect attention from the real issue, to their economic benefit. It’s a tried and true tactic that’s working just fine.

By the way, I don’t agree with the columnist’s assertion that we should all try to make as much as we can. This type of thinking, in fact, is a large part of the problem. Where does the additional money come from? Sure, a lot of it is printed (so to speak — it’s largely created electronically) but that creates little real value. It comes from further unsustainable exploitation of resources and concomitant degradation. It’s perhaps amusing to imagine a world with lots of rich people and a dead planet, but the planet will largely get rid of us before that happens.

At some point we’re going to have to grow up and recognize the differences between wants and needs, especially in the US, where we’re consuming resources per capita way out of proportion to others, yet continue to think we’ve some special right to do so and imagine the rest of the world should follow. It’s not possible.

Posted by LeonBreaux | Report as abusive

You can look at taxpayers in (at least) one of two ways.

First, you can consider them property and all the fruit of their labor and their ancestors’ labor as your own. Through your generosity, you permit them to retain an obscenely large portion of their income. And since we do not live in a dictatorship, there are those as worthy as yourself, your fellow property owners, who should not pay much at all. After all, this is how creation is meant to be.

Second, you might consider all taxpayers as members of the same community as yourself. This “democratic” and “egalitarian” view holds that we all contribute toward the common good. In communities, more is expected from the strong than from the weak.

Given that the USA taxes common salaried workers at over double the rate of billionaires, which model do you think we follow? The rich take, and take, and then take some more, and then complain about not being “able” to afford to pay taxes. And they sell us demeaning views of our Government Insurance (which is only mandatory for the masses) payouts. The Government throws away our premiums for decades, spending them on the hobby wars of the rich, and then keeps massive assets for its own use and cannot “afford” to pay you an average $1200. per month benefit for 12 years on average in spite of owning almost the entire mineral wealth of the country. And being the largest landowner. As tax free as the Queen of England, and with half the heart.

Posted by usagadfly | Report as abusive

One of the stats that gets lost in the chaos is that almost 50% of Americans pay no income tax. The reason is that they make very little money, and many are officially classified as below the poverty line. The fact that half the people in the country are making so little doesn’t seem to register with those who want to trumpet ‘exceptionalism’. Major income inequality has been feature of many failed economies and states, and the harbinger of revolutions, both violent and social. It surpasses belief that anyone who wants to talk about this outside of a ‘quiet room’ is promoting class warfare.

Posted by steve778936 | Report as abusive

It is a sad state of affairs indeed when in this age of enlightenment we can’t create & enforce a fair tax system.
That’s because those in power are criminally corrupt and we, the average citizens, have no power to stop them…..except by a bloody revolution.

Posted by GMavros | Report as abusive

This chart in this article is extremely misleading in that it omits the extra tax that falls on the first $110,100 of earned income. Yes, I mean Social Security, which is definitely a tax on income, but just “earned” income so the very rich aren’t bothered. The 2012 rate is 13.3% including the employers share (hidden from paycheck but still a tax based on the employees income and medicare which is also based on earned income).
When you correct the chart for this you will find that the peak rate occurs for workers with incomes just around $110,000 – arguably the hardest working, most productive folks in the upper middle class. Yes, the lowest real rates are at the top and the bottom incomes and the middle class is carrying the biggest load.

By the way, Fred Flintstone’s comment of June 6, 7:28 pm is well worth reading. Scroll down if you don’t have time to read them all.

Posted by QuietThinker | Report as abusive

Columnist here,

@QuietThinker, the effect of payroll taxes is discussed in the column. For that $61,500 worker payroll taxes are more than the 15% income tax, raising the total to 30.3%.

I have argued that the SS surplus taxes since 1984 have been used to finance tax cuts for those at the top, so this is not an issue ignored. The 400 graphic, measuring only federal income tax, shows how progressively stops at the $5m income level and falls sharply above that.

Posted by DavidCayJ | Report as abusive

David, as usual an excellent article.

However, the extremely low short term capital gains tax rate and various shelters (real estate 1031 exchange) have had a devastating affect on the US financial markets and overall economy. Short term cap gains, often realized in a matter of hours or days, used to be over 70% prior to the Reagan tax changes. Since they are tied to marginal income tax rates (where is the logic on this?), speculators are enjoying the lowest tax rates on profits since the 1920s. The result is a boom/bust economy and financial markets ruled by speculators, not investors.

The 1031 Exchange is directly responsible for much of the real estate bubble. Can one imagine what would happen to stock prices if you could sell your stocks and avoid cap gains taxes all together by just buying another stock?

You are correct in explaining the obvious inequality in tax rates among income/wealth classes, but perhaps your next article can also detail how the current tax code rewards speculation at the expense of long term investments.

Posted by Acetracy | Report as abusive

“Any time that a liberal points out that the wealthy are disproportionately benefiting from [Bush’s} tax policies, Republicans shout, “class warfare!”
In her book A Distant Mirror: The Calamitous Fourteenth Century, Barbara Tuchman writes about a peasant revolt in 1358 that began in the village of St. Leu and spread throughout the Oise Valley. At one estate, the serfs sacked the manor house, killed the knight, and roasted him on a spit in front of his wife and kids. Then, after ten or twelve peasants violated the lady, with the children still watching, they forced her to eat the roasted flesh of her dead husband and then killed her.
That is class warfare.
Arguing over the optimum marginal tax rate for the top one percent is not.”
– Al Franken

Posted by EPB | Report as abusive

Tax Revenues over the last 20-30 years have gone down…and spending in the wrong way has drastically gone up (2 wars, and gambling bailouts). Entitlements are supported only by the wage earners and I believe that tax cuts off at $106,000? If we simply raised income to $150m-175m of wages, we would resolve the underfunded Social Security and Medicare. (now on the other side of that, we do not monitor the enormous fraud that occurs with Social Security and Medicare/Medicaid… Homeland Security move in on that job with force)!

When dividends went from taxable income rate (39%)? to 15%, I remember a Trust fund friend said to me, I have had a tremendous increase in my income. This is a dear friend, and with all due respect, the individual has never worked a day in their life and therefore their income contributed very little to the funding of our wars, the bailouts etc.

The American people are so mis-informed in current times, for the 24 hour news cycle lacking true journalism (fact finding) is corrupt. I remember being at cousins house and they said they wanted to watch the news and put on Fox News..that is not news… and this goes for MSNBC as well. Did you ever think we would come to a day where we could tune into a 24 hour Political news channels. And you should really listen to car radio, for the political and religious channels are creating propaganda!! I encourage everyone to watch the movie Network with Faye Dunaway-William Holden..

Posted by mmcg | Report as abusive

I’m not sure why my original comment has yet to show, I thought it posed some interesting questions which were not discussed in your opinion piece.

It has also occurred to me that in calculating the effective tax rate of the individual wage earner that the author declares the employer portion of the payroll tax to be “hidden wages taxed at a 100 percent tax rate”, but fails to include these hidden wages in the wage earners total income. Applying the employer portion of the payroll tax to the wage earners tax bill but failing to include the same figure in the wage earners compensation makes the effective tax rate larger than it really is.

In the same token, failing to include the portion of the corporate income tax that is paid on behalf of capital owners makes their effective tax rate seem smaller than it actually is.

Why does the author of the piece calculate effective tax rates in this manner? It appears to be sleight-of-hand far removed from economic reality, perhaps designed to create the most sensational figures rather than the most sensible ones. (Warren Buffett made the same two oversights in declaring that his secretary pays a higher tax rate than he does).

Posted by TaxIncidence | Report as abusive

@FredFlintstone,

You claim that “there are many countries in the world that manage to balance the competing economic, social, and political interests in their society.”. It would be nice for you to specify which specific countries do such an admirable job of this and how they go about doing so. Fact of the matter is, most of the international data and figures on taxation provided by the OECD and similar organizations tells us that most other countries apply larger payroll taxes to wage earners paychecks, have higher effective income tax rates for low and middle income earners and subject consumption from whatever income is left over to federal sales taxes and/or value-added taxes. The US also has a larger GDP per capita than these so-called balanced societies, meaning that although the U.S. collects less in taxes as a percentage of GDP, the absolute amount of tax dollars per capita collected is equal to that of a high tax/GDP Western European nation.

Posted by TaxIncidence | Report as abusive

@TreyGerrit,

The analysis I have seen for why higher earners can end up with no tax liability are largely due to three of the reasons you’ve mentioned;

1)charitable donations — donating wealth against current income

2)foreign tax credit — designed to avoid double taxation on income earned in foreign jurisdictions (most of the developed world uses a territorial tax system and does not have this problem in the first place)

3)business losses — explains why the number of non-payers rises markedly during recessions

Posted by TaxIncidence | Report as abusive

David,

Where do you get this idea that the employer share of social security taxes should be factored into the individual tax rate that someone pays? Are we to assume that every expense incurred would have gone to the employee and is really a hidden 100% tax. Why not add in Workers Comp, unemployment taxes, compliance costs, payroll fees?

Posted by curleybrothers | Report as abusive

No doubt about it, we need tax reform in the form of a low flat tax,one rate for everyone, rich, poor – all.

Posted by zotdoc | Report as abusive

Columnist here,

several posters ask about payroll taxes.

Grossing up the wages of both the single worker and the top 400 does not significantly change the results, which are utterly insignificant at the top.

The employer-paid portion of payroll tax is, in economic theory and tax policy convention, wages earned by the worker, but not seen by the worker.

An employer (and I am one) looks at the $61,500 worker and sees a worker whose cost including payroll tax is really $66,205 because of the 7.65% employer-side of the payroll tax. So all I did here was apply standard practice used by tax economists of all stripes.

Interestingly, at one of the widely read websites that linked to this column posters complain that the chart excludes payroll taxes as being misleading, the opposite of the comments posted here.

The news I broke here is that among those reporting an average $202.4m on their tax returns, six paid nothing and the 110 paid at the same or lower rates than a worker earning a bit more than $5k/month and that only a fifth of the 400 paid at the “Buffett rule rate” (all at 30% to 35%). That shows how porous the income tax is.

@ zotdoc, I encourage you to read my work, and that of others, on marginal utility. A flat rate is a burden on those with modest incomes, a boon to those with larger incomes and violates economic and public finance principles dating back 2.5 millennia — and which every classic worldly philosopher supported. The rate also has nothing to do with deferral and recognition, discussed above in my column.

Posted by DavidCayJ | Report as abusive

“The employer-paid portion of payroll tax is, in economic theory and tax policy convention, wages earned by the worker, but not seen by the worker.”

It is also standard economic theory to apply the corporate income tax to capital owners, but you neglect to do so.

“The news I broke here is that among those reporting an average $202.4m on their tax returns, six paid nothing and the 110 paid at the same or lower rates than a worker earning a bit more than $5k/month and that only a fifth of the 400 paid at the “Buffett rule rate” (all at 30% to 35%). That shows how porous the income tax is.”

If you fail to include the business/corporate income tax as taxes paid by capital owners, then there is no nation on earth where a single wage earners pays a lower effective tax rate than a high earner with substantial capital income/capital gains. As I mentioned earlier, most OECD nations have higher payroll taxes and higher income tax rates on middle-income wage earners (especially singles).

Posted by TaxIncidence | Report as abusive

Sorry David, I am not buying the payroll tax arguement. I have been a CPA for 25 years and have never had one employer think that way. We do not tell our employees we are paying you a $66,205 salary when we are only paying them $61,500.

Using your arguement, Derek Jeter who lets assume makes $20 million is paying in $594,000 into social security and medicare per year. But since this is less than 3%, you and Buffet say he is not paying his fair share.

Jeter will get the same monthly social security check as the guy who paid in less than 1/50 of what he paid in. Jeter will pay triple for Medicare B premiums as the guy who made $61,500. The whole line of thinking is nonsense.

Posted by curleybrothers | Report as abusive

Columnist here…

@ curleybrothers, you may find it enlightening to look at the annual statements that many corporations distribute to their employees or that they can get if they inquire about some portion of their compensation. From many conversations over the years I know people are often astonished at what the employer counts as compensation above salary. But from an employer’s POV, accurate accounting of course requires all-in costs.

The compensation statements I have received over the years, and many others I have reviewed including my nonprofit CEO wife’s just now, show the full Social Security tax, not just half of it. This is a real cost born by employers, including the corporation owned by me and two of my sons.

But, in any event, the measurement I used is the convention for tax economists and is consistently applied in my column above (and the contours are defined). So, while you think it is not best to apply the convebtion, my column maintains apples-to-apples comparisons, giving you the ability to back out the employer’s added cost if you wish and make a comparison of only part of the compensation on an apples-to-apples basis.

And, again, the news here is that six families making on average in the $200 million range paid NO federal income taxes and another 110 paid less than a single worker earning $61,500 in cash wages.

Posted by DavidCayJ | Report as abusive

In America, which issues its own currency taxes don’t pay for anything. Taxes are tools to stabilize aggregate demand. Taxes should be cut across the board by 90% since they are not revenue used to fund government expenditures.

Inflation is highly unlikely with core inflation at 2% and unemployment at 22%. Deficit spending is the only way to fund demand. Capitalisim survives on sales not austerity.

Posted by PotomacOracle | Report as abusive