Tax Rates Fell by a Third for the 400 Richest Americans, Whose Average Income Doubled to $263 million a Year Under George Bush's Presidency
January 31, 2009
NOT FRONT PAGE NEWS???
in print edition C-4
The average tax rate paid by the richest 400 Americans fell by a third to 17.2% through the first six years of the Bush administration, and their average income doubled to $263.3 million, new data show. The 17.2% in 2006 was the lowest since the Internal Revenue Service began tracking the 400 largest taxpayers in 1992, although they paid more tax on an inflation-adjusted basis than for any year since 2000. The drop from 2001’s tax rate of 22.9% was largely because of President Bush’s push to cut tax rates on most capital gains to 15% in 2003. Capital gains made up 63% of the richest 400 Americans’ adjusted gross income in 2006, or a combined $66.1 billion, according to the data. In all, those taxpayers reported a combined $105.3 billion in adjusted gross income in 2006, the most recent year for which the IRS has data. “The big explosion in income for this group is clearly on the capital gains side, although there are also sharp increases in dividend and interest income,” said Dean Baker, co-director of the Center for Economic Policy and Research in Washington. In addition, “they are realizing more of their gains due to the lower tax rate,” Baker said. The data may provide ammunition for Democrats such as House Speaker Nancy Pelosi of San Francisco who say they intend to increase the capital gains tax rate even as the credit crunch roils markets and is producing more investment losses than gains. President Obama pledged during the presidential campaign to increase the rate.
Our guest blogger is Adam Jentleson, the Communications and Outreach Director for the Hyde Park Project at the Center for American Progress Action Fund.
In 1980, Ronald Reagan famously asked America, “Are you better off than you were four years ago?”
After eight years of conservative rule, it’s worth posing a similar question – are Americans better off today than they were eight years ago?
As our new memo shows, unless you happen to be a big corporation or make enough money to be in the top percentage of earners, the answer is probably no:
A variety of metrics can be used to judge this question and assess what eight years of conservative policies have wrought. The picture painted here is clear: from job growth to debt, and from income disparity to national poverty indices, the conservative approach of putting big corporations and the very wealthy ahead of the middle class has failed to create prosperity that can be shared by all Americans.