The Rich Got Richer – and They Paid Lower Taxes!

by Reggie Oldak, Senior Counsel,
National Women's Law Center

According to a recently-released IRS report, the earnings of the 400 wealthiest taxpayers hit new highs in 2007. Adding insult to injury, the tax rates they paid dipped to new lows.

The group had an average income of $344.8 million (each) in 2007, up from an average of $263.3 million in 2006. At the same time, their effective income tax rate fell to 16.62 percent, down from 17.17 percent in 2006. In 1992, the first year the IRS published this data, average income was “just” $46.79 million; the effective tax rate was 26.38 percent. 

In 2007, twenty five of the top 400 paid an effective tax rate of 10 percent or less, and almost three-quarters of them paid 20 percent or less.

The IRS is careful to explain that their data represent a changing group of taxpayers over time rather than the same 400 every year, but I can tell you I’m not on the list in any year.

Who says the rich are just like the rest of us?