Buffett v. The Data, Part Deux
In the comments of my previous post, co-blogger Steve stated, “[o]nly at the very top do taxes become regressive”; and – by way of supporting this statement – pointed (indirectly) to an IRS report regarding the 400 highest-AGI tax returns for 2008. The data from this report, as well as other IRS data for that year, illustrates two things:
- Effective income tax rates do start to decline at the highest income levels.
- OTOH, the effective income tax rates at those levels remain well above those for most lower-income categories.
These points are graphically illustrated in Figure 1, which gives the effective income tax rates for various Adjusted Gross Income categories in 2008.
Granted, Fig. 1 only considers income taxes. However, as Figure 2 shows, the aforementioned points remain valid when we include other federal taxes (e.g., FICA, excise, corporate).
I find it hard to get excited about the very-very-rich paying a somewhat lower federal tax rate than the very-rich, when rates for both groups remain higher than those for most other income categories.
Sources and Notes
In Figure 1:
- The effective income tax rates for the categories between $1 & $50k, and between $500k & $10 mil, were calculated using the Adjusted Gross Income data in col. 2 of this IRS table, and the “Total income tax” numbers in col. 41 of this table.
- The effective income tax rates for the categories between 50k & 500k were calculated using the AGI & “Total income tax” numbers from columns 2 & 62, respectively, of Table B in IRS Publication 1304 (Rev. 07-2010).
- The effective income tax rate for the “Top 400” was calculated using 2008 AGI & aggregate income tax data from Table 1, pp. 1 & 10, of this IRS report.
- The aggregate AGI for the “$10 mil+ ex Top 400” category was calculated by subtracting the AGI for the top 400 from the AGI of the “$10,000,000 or more” category in this table; the same procedure was used to calculate the aggregate income tax for the “$10 mil+ ex Top 400” category.
Figure 2 was generated using the 2005 Total Effective Federal Tax Rate data in Table 1 of this CBO report.