One-Quarter Of U.S. Millionaires Have Smaller Tax Burden Than Some Of Middle Class: Study
Into the debate over whether America's wealthiest citizens should pay more in taxes -- a point that Warren Buffett pressed in August, and that has lately been taken up in full voice by the Occupy Wall Street protesters -- comes new information suggesting that millionaires could be doing more to pull their weight.
Tens of thousands of millionaires -- 94,500, to be exact, or a quarter of all millionaires in the U.S. -- pay a smaller percentage of their income as taxes than millions of middle-class households, according to a study cited by the Washington Post. For some millionaires, the tax burden is as low as 24 percent, compared with the better than 26.5 percent tax rate faced by many families making less than $100,000 a year.
These findings, from the Congressional Research Service, echo an earlier report that found that more than 1,400 millionaires paid no income taxes at all in 2009, and could help to inflame popular support for the kind of tax reform that would ask more of the wealthy. President Obama included such a measure in his budget plan last month, taking up Warren Buffett's assertion that millionaires shouldn't pay a lower tax rate than middle-class earners. Buffett yesterday said he gave only 17.4 percent of his entire taxable income to the government last year.
With the economy growing and adding jobs at a frustratingly slow pace, the question of whether millionaires can be made to pay more in taxes -- thus funding programs that could help rehabilitate the economy -- has become particularly pressing. Earlier this week, President Obama's Council on Jobs and Competitiveness listed fixing America's infrastructure as its top priority.
Democratic leaders in Congress are angling for legislation this week that would raise the tax burden on the rich as a way of paying for parts of the president's jobs bill.
Multiple polls have showed that a majority of Americans support raising taxes on the rich, despite the conservative argument that such tax hikes would reduce hiring and cause investment capital to dry up.
Evidence suggests that in fact, raising the tax burden on the wealthy would have little effect on their spending and investment habits, and would likely do negligible damage to the overall economy. No strong historical correlation exists between national prosperity and low tax rates for the rich. A study has shown, however, that countries that ask their richest citizens to pay more in taxes tend to be happier on average.
In perhaps the most visible expression to date of Americans' growing unhappiness with tax policy, hundreds of Occupy Wall Street demonstrators -- many of whom have now been camped in Manhattan's Zuccotti Park for nearly a month, protesting income inequality, corporate influence in politics, and preferential treatment for banks and other financial institutions -- marched past the homes of a number of millionaires on the Upper East Side this Tuesday, denouncing the expiration of a 2009 tax hike on high earners.