In 2009, Americans handed over the smallest percentage of their income to the government in 30 years. A major reason? Rich people paid less in taxes.
The Great Recession was responsible for the drop in two ways, according to the report. Firstly, the downturn hammered American incomes. And secondly, President Obama passed a variety of tax cuts as part of a stimulus package.
Earners in the top one percent saw their incomes fall faster between 2007 and 2009 than that of other groups, the report found. Still, they may have fared better than others as a result of the recession; the median net worth of the wealthiest Americans rose 10 percent during the downturn, while median household net worth overall fell to levels not seen since 1992, according to a Federal Reserve report from June.Why care about low tax rates? States with the highest personal income tax rates did a better job of weathering the economic turbulence of the 2000s than their counterparts with lower personal income tax rates, according to a recent report from the Institute on Taxation and Economic Policy. Food for thought .