Feb 18, 2010

IRS: 400 richest averaged $345M in '07 income, 16% tax rate

06:54 PM

On a day when the Internal Revenue Service came under literal attack, the agency reports that the nation's 400 highest-earning households reported an average income of $345 million in 2007 — up 31% from 2006 — and that their average tax bill fell to a 15-year low.

Bloomberg writes that the elite 400's average income more than doubled that year from $131.1 million in 2001, the year Congress adopted tax cuts urged by then-President George W. Bush.

Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992, the Internal Revenue Service statistics show. The top 400 paid $23 billion in taxes in 2007, up from $18 billion a year earlier, and a bigger amount than any year since 1992.

Their average effective tax rate was about half the 29.4 percent in 1993, the first year of President Bill Clinton's administration, when taxes were increased. The top 400 earners reported an average of $46 million of income that year. ..

The top 400 earners received a total $138 billion in 2007, up from $105.3 billion a year earlier. On an inflation-adjusted basis, their average income grew almost fivefold since 1992, the data show. The data doesn't disclose the identities of the top 400 taxpayers, and the people on the list change from year to year as their incomes rise and fall. Some 6,400 households have been included in the top 400 since the IRS began tracking their incomes 16 years ago. ...

Almost three-quarters of the highest earners' income was in capital gains and dividends taxed at a 15 percent rate set as part of Bush-backed tax cuts in 2003, the statistics show. Of the 400 earners, 289 paid a total effective federal tax rate of 20 percent or less in 2007, the last year for which figures were available, the data show. ..

To be included among the fortunate 400, the IRS says, a household had to earn at least $143 million.

http://content.usatoday.com/communities ... tax-rate/1