" Mitt Romney is not alone. I thought Mr. Romney’s 13.9 percent federal tax rate would be hard to beat. But among the 400 Americans with the highest adjusted gross incomes in 2008, 30 of them paid less than 10 percent and another 101 paid less than 15 percent. And these people earned, on average, more than 10 times Mr. Romney’s $21.7 million — an average of $270.5 million each.
Relatively few taxpayers pay an enormous percentage of the total federal income tax, and most of them are people who work for a living and have adjusted gross incomes of $100,000 to $500,000, which is the sweet spot for tax revenue. They account for 20.2 percent of total returns but pay a whopping 44.9 percent of total tax. The average tax rate for this group ranges from 11.9 percent for those with less than $200,000 in adjusted gross income to 19.6 percent for those with $200,000 to $500,000. Above those income levels, the rate rises to close to 25 percent and then declines to 22.6 percent for taxpayers earning more than $10 million.
The budget that President Obama unveiled this week included some hot-button tax measures aimed at some of these inequities: capping deductions and raising taxes on people earning more than $1 million (the so-called Buffett Rule), scrapping the alternative minimum taxand raising the tax on dividend income and carried interest. The liberal Economic Policy Institute noted, “No budget is perfect,” but applauded the president’s stab at tax reform. “The need for the Buffett Rule,” it said, “is largely driven by the preferential tax treatment of investment income over work income.”